Eagle Point Credit (NYSE: ECC) and Interactive Brokers Group (NASDAQ:IBKR) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, valuation, analyst recommendations and dividends.
This is a breakdown of recent ratings for Eagle Point Credit and Interactive Brokers Group, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Eagle Point Credit||0||0||4||0||3.00|
|Interactive Brokers Group||2||3||1||0||1.83|
Eagle Point Credit currently has a consensus price target of $21.13, indicating a potential upside of 18.95%. Interactive Brokers Group has a consensus price target of $50.50, indicating a potential downside of 23.73%. Given Eagle Point Credit’s stronger consensus rating and higher possible upside, analysts plainly believe Eagle Point Credit is more favorable than Interactive Brokers Group.
Eagle Point Credit pays an annual dividend of $2.40 per share and has a dividend yield of 13.5%. Interactive Brokers Group pays an annual dividend of $0.40 per share and has a dividend yield of 0.6%. Eagle Point Credit pays out 138.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Interactive Brokers Group pays out 37.4% of its earnings in the form of a dividend.
Valuation & Earnings
This table compares Eagle Point Credit and Interactive Brokers Group’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Eagle Point Credit||$65.29 million||5.11||$31.13 million||$1.73||10.27|
|Interactive Brokers Group||$1.93 billion||14.15||$76.00 million||$1.07||61.88|
Interactive Brokers Group has higher revenue and earnings than Eagle Point Credit. Eagle Point Credit is trading at a lower price-to-earnings ratio than Interactive Brokers Group, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Eagle Point Credit has a beta of 0.21, indicating that its stock price is 79% less volatile than the S&P 500. Comparatively, Interactive Brokers Group has a beta of 0.93, indicating that its stock price is 7% less volatile than the S&P 500.
Insider and Institutional Ownership
57.1% of Eagle Point Credit shares are owned by institutional investors. Comparatively, 15.9% of Interactive Brokers Group shares are owned by institutional investors. 0.6% of Eagle Point Credit shares are owned by insiders. Comparatively, 2.0% of Interactive Brokers Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
This table compares Eagle Point Credit and Interactive Brokers Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Eagle Point Credit||47.68%||10.46%||7.06%|
|Interactive Brokers Group||3.94%||1.74%||0.18%|
Eagle Point Credit beats Interactive Brokers Group on 9 of the 16 factors compared between the two stocks.
Eagle Point Credit Company Profile
Eagle Point Credit Company Inc. is a non-diversified, closed-end management investment company. The Company’s primary investment objective is to generate high current income, with a secondary objective to generate capital appreciation. The Company primarily invests in equity and junior debt tranches of collateralized loan obligations (CLOs) that are collateralized by a portfolio consisting primarily of the below investment grade United States senior secured loans. It may also invest in other securities and instruments related to these investments. The Company’s portfolio includes its investments in various industries, such as business equipment and services; healthcare; electronics/electrical; leisure goods/activities/movies; retailers (except food and drug); chemicals and plastics; telecommunications; financial intermediaries, and utilities. The Company’s advisor is Eagle Point Credit Management LLC.
Interactive Brokers Group Company Profile
Interactive Brokers Group, Inc. (IBG, Inc.) is a holding company. The Company is an automated global electronic broker and market maker specializing in routing orders, and executing and processing trades in securities, futures, foreign exchange instruments, bonds and mutual funds on over 120 electronic exchanges and market centers around the world and offering custody, prime brokerage, securities and margin lending services to customers. It operates in two segments: electronic brokerage and market making. It conducts its electronic brokerage business through its Interactive Brokers (IB) subsidiaries. It conducts its market making business through its Timber Hill (TH) subsidiaries. In the United States, it conducts its business from Greenwich, Connecticut and Chicago, Illinois. Outside the United States, it conducts business in Canada, England, Switzerland, Liechtenstein, China (Hong Kong and Shanghai), India, Australia and Japan.
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