Garrison Capital (NASDAQ: GARS) and Gamco Investors (NYSE:GBL) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, risk, dividends, earnings, valuation, profitability and analyst recommendations.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Garrison Capital and Gamco Investors, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Garrison Capital 0 5 1 0 2.17
Gamco Investors 0 0 0 0 N/A

Garrison Capital currently has a consensus target price of $10.17, indicating a potential upside of 22.64%. Given Garrison Capital’s higher probable upside, equities analysts plainly believe Garrison Capital is more favorable than Gamco Investors.

Dividends

Garrison Capital pays an annual dividend of $1.12 per share and has a dividend yield of 13.5%. Gamco Investors pays an annual dividend of $0.08 per share and has a dividend yield of 0.3%. Gamco Investors pays out 2.2% of its earnings in the form of a dividend. Gamco Investors has raised its dividend for 5 consecutive years.

Profitability

This table compares Garrison Capital and Gamco Investors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Garrison Capital -0.38% 8.33% 3.97%
Gamco Investors 30.81% -54.62% 53.85%

Earnings & Valuation

This table compares Garrison Capital and Gamco Investors’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Garrison Capital N/A N/A N/A N/A N/A
Gamco Investors $361.19 million 2.27 $181.57 million $3.68 7.73

Gamco Investors has higher revenue and earnings than Garrison Capital.

Insider and Institutional Ownership

22.0% of Garrison Capital shares are owned by institutional investors. Comparatively, 25.4% of Gamco Investors shares are owned by institutional investors. 5.8% of Garrison Capital shares are owned by company insiders. Comparatively, 79.0% of Gamco Investors shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Risk and Volatility

Garrison Capital has a beta of 0.24, indicating that its stock price is 76% less volatile than the S&P 500. Comparatively, Gamco Investors has a beta of 1.08, indicating that its stock price is 8% more volatile than the S&P 500.

Summary

Gamco Investors beats Garrison Capital on 8 of the 13 factors compared between the two stocks.

About Garrison Capital

Garrison Capital Inc. is a managed, closed-end, non-diversified management investment company. The Company’s investment objective is to generate current income and capital appreciation by making investments primarily in debt securities and loans of the United States-based middle-market companies, which it defines as those having annual earnings before interest, taxes and depreciation, or EBITDA, of certain amount. It invests or provides direct lending in first lien senior secured loans, second lien senior secured loans, one-stop senior secured loans or unitranche loans, subordinated or mezzanine loans, unsecured consumer loans and to a lesser extent, selected equity co-investments in middle-market companies. The Company intends to generate risk-adjusted net returns by assembling a portfolio of investments. The Company’s investment advisor is Garrison Capital Advisers LLC.

About Gamco Investors

GAMCO Investors, Inc. is a holding company. The Company is a provider of investment advisory services to open and closed-end funds, institutional and private wealth management investors principally in the United States. The Company operates through the investment advisory and asset management business segment. It manages assets on a discretionary basis and invests in securities through various investment styles. Its assets under management are organized into three groups: Institutional and Private Wealth Management; Open and Closed-End Funds, and the GAMCO International SICAV (SICAV). The Company provides advisory services to a range of investors, including corporate retirement plans, foundations, endowments and private wealth clients, and also serves as sub-advisor to third-party investment funds, including registered investment companies. As of December 31, 2016, it had provided advisory services to 21 open-end funds, 15 closed-end funds and one exchange traded managed fund.

Receive News & Ratings for Garrison Capital Inc. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Garrison Capital Inc. and related companies with MarketBeat.com's FREE daily email newsletter.