TICC Capital Corp. (NASDAQ: TICC) and Stonegate Mortgage Corp (NYSE:SGM) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, risk, earnings, profitabiliy, dividends, valuation and institutional ownership.

Analyst Ratings

This is a breakdown of recent ratings and price targets for TICC Capital Corp. and Stonegate Mortgage Corp, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TICC Capital Corp. 3 0 0 0 1.00
Stonegate Mortgage Corp 0 1 2 0 2.67

TICC Capital Corp. presently has a consensus price target of $6.00, suggesting a potential downside of 18.03%. Stonegate Mortgage Corp has a consensus price target of $6.00, suggesting a potential downside of 24.91%. Given TICC Capital Corp.’s higher possible upside, equities research analysts clearly believe TICC Capital Corp. is more favorable than Stonegate Mortgage Corp.

Volatility and Risk

TICC Capital Corp. has a beta of 0.69, indicating that its share price is 31% less volatile than the S&P 500. Comparatively, Stonegate Mortgage Corp has a beta of 1.48, indicating that its share price is 48% more volatile than the S&P 500.

Earnings and Valuation

This table compares TICC Capital Corp. and Stonegate Mortgage Corp’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
TICC Capital Corp. $70.48 million 5.35 $123.55 million $2.40 3.05
Stonegate Mortgage Corp $189.69 million 1.09 -$38.52 million ($1.49) -5.36

TICC Capital Corp. has higher revenue, but lower earnings than Stonegate Mortgage Corp. Stonegate Mortgage Corp is trading at a lower price-to-earnings ratio than TICC Capital Corp., indicating that it is currently the more affordable of the two stocks.

Dividends

TICC Capital Corp. pays an annual dividend of $0.80 per share and has a dividend yield of 10.9%. Stonegate Mortgage Corp does not pay a dividend. TICC Capital Corp. pays out 33.3% of its earnings in the form of a dividend.

Profitability

This table compares TICC Capital Corp. and Stonegate Mortgage Corp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TICC Capital Corp. 197.98% 7.55% 4.29%
Stonegate Mortgage Corp -26.69% 3.92% 0.69%

Institutional and Insider Ownership

19.0% of TICC Capital Corp. shares are owned by institutional investors. Comparatively, 44.3% of Stonegate Mortgage Corp shares are owned by institutional investors. 1.7% of TICC Capital Corp. shares are owned by company insiders. Comparatively, 44.5% of Stonegate Mortgage Corp shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

About TICC Capital Corp.

TICC Capital Corp. is a closed-end, non-diversified management investment company. The Company’s investment objective is to maximize its portfolio’s total return. The Company primarily focuses on seeking current income by investing primarily in corporate debt securities. The Company’s debt investments may include syndicated loans and bilateral loans. The Company holds interests in structured finance investments, including collateralized loan obligation (CLO) investment vehicles that own debt securities. CLO investments may also include warehouse facilities, which are financing structures intended to aggregate loans that may be used to form the basis of a CLO vehicle. The Company may also invest in publicly traded debt and/or equity securities. Its portfolio includes its investments in various industries, such as structured finance, telecommunication services, business services, printing and publishing, and financial intermediaries. TICC Management, LLC is its investment advisor.

About Stonegate Mortgage Corp

Stonegate Mortgage Corporation is a non-bank mortgage company. The Company is focused on originating, financing and servicing the United States residential mortgage loans. The Company’s segments include Originations, Servicing, Financing and Other. The Originations segment primarily originates and sells residential mortgage loans, which conform to the underwriting guidelines of the government sponsored enterprises and government agencies, and non-agency whole loan investors. The Servicing segment includes loan administration, collection and default activities, including the collection and remittance of loan payments, responding to customer inquiries, collection of principal and interest payments, holding custodial funds for the payment of property taxes and insurance premiums, counseling delinquent mortgagors and modifying loans. The Financing segment includes warehouse-lending activities to correspondent customers by the Company’s subsidiary, NattyMac, LLC.

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