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

Dividends

Gamco Investors pays an annual dividend of $0.08 per share and has a dividend yield of 0.3%. Safeguard Scientifics does not pay a dividend. Gamco Investors pays out 2.2% of its earnings in the form of a dividend. Safeguard Scientifics has increased its dividend for 5 consecutive years.

Volatility & Risk

Gamco Investors has a beta of 1.08, meaning that its share price is 8% more volatile than the S&P 500. Comparatively, Safeguard Scientifics has a beta of 1.3, meaning that its share price is 30% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Gamco Investors and Safeguard Scientifics, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Gamco Investors 0 0 0 0 N/A
Safeguard Scientifics 0 0 0 0 N/A

Profitability

This table compares Gamco Investors and Safeguard Scientifics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Gamco Investors 30.81% -54.62% 53.85%
Safeguard Scientifics N/A -61.90% -42.77%

Institutional & Insider Ownership

25.4% of Gamco Investors shares are held by institutional investors. Comparatively, 77.6% of Safeguard Scientifics shares are held by institutional investors. 79.0% of Gamco Investors shares are held by company insiders. Comparatively, 2.7% of Safeguard Scientifics shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Gamco Investors and Safeguard Scientifics’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Gamco Investors $361.19 million 0.82 $181.57 million $3.68 7.86
Safeguard Scientifics N/A N/A -$17.72 million ($4.76) -2.68

Gamco Investors has higher revenue and earnings than Safeguard Scientifics. Safeguard Scientifics is trading at a lower price-to-earnings ratio than Gamco Investors, indicating that it is currently the more affordable of the two stocks.

Summary

Gamco Investors beats Safeguard Scientifics on 8 of the 12 factors compared between the two stocks.

Gamco Investors Company Profile

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.

Safeguard Scientifics Company Profile

Safeguard Scientifics, Inc. is engaged in providing capital to technology companies within the fields of healthcare, financial services and digital media. The Company holds interest in companies, which it refers to as partner companies. As of December 31, 2016, the Company held interests in 29 non-consolidated partner companies. The Company offers operational and management support to each of its partner companies. In addition to management and operational support, the Company offers ongoing planning and development assessment. It provides mentoring, advice and guidance to develop partner company management. The Company serves on the boards of directors of its partner companies, working with them to develop and implement strategic and operating plans. It measures and monitors achievement of these plans through regular review of operational and financial performance measurements.

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