Head to Head Comparison: ONEX (OTCMKTS:ONEXF) and Great Elm Capital Group (NASDAQ:GECC)

ONEX (OTCMKTS:ONEXF) and Great Elm Capital Group (NASDAQ:GECC) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, risk, earnings, dividends, valuation, profitability and analyst recommendations.

Volatility and Risk

ONEX has a beta of 1.33, meaning that its share price is 33% more volatile than the S&P 500. Comparatively, Great Elm Capital Group has a beta of 0.64, meaning that its share price is 36% less volatile than the S&P 500.

Dividends

ONEX pays an annual dividend of $0.28 per share and has a dividend yield of 0.4%. Great Elm Capital Group pays an annual dividend of $1.48 per share and has a dividend yield of 19.3%. ONEX pays out 4.5% of its earnings in the form of a dividend. Great Elm Capital Group pays out -264.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Great Elm Capital Group has raised its dividend for 2 consecutive years. Great Elm Capital Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares ONEX and Great Elm Capital Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ONEX	$649.00 million	8.35	$303.00 million	$6.21	12.72
Great Elm Capital Group	$39.32 million	2.72	$3.55 million	($0.56)	-13.66

ONEX has higher revenue and earnings than Great Elm Capital Group. Great Elm Capital Group is trading at a lower price-to-earnings ratio than ONEX, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares ONEX and Great Elm Capital Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ONEX	56.15%	5.11%	3.18%
Great Elm Capital Group	-17.08%	10.97%	3.95%

Analyst Recommendations

This is a summary of current ratings and recommmendations for ONEX and Great Elm Capital Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ONEX	0	1	2	0	2.67
Great Elm Capital Group	2	1	0	0	1.33

Great Elm Capital Group has a consensus target price of $10.50, suggesting a potential upside of 37.25%. Given Great Elm Capital Group’s higher possible upside, analysts clearly believe Great Elm Capital Group is more favorable than ONEX.

Insider & Institutional Ownership

0.7% of ONEX shares are held by institutional investors. Comparatively, 38.8% of Great Elm Capital Group shares are held by institutional investors. 8.7% of Great Elm Capital Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

ONEX beats Great Elm Capital Group on 9 of the 17 factors compared between the two stocks.

About ONEX

Onex Corporation is a private equity firm specializing in acquisitions and platform acquisitions. The firm makes investments in buyouts, large- middle market, large-cap, mid-cap, and small-cap market and distressed companies. It also invests in recapitalization, growth capital, corporate carve-outs of subsidiaries and mission-critical supply divisions from multinational corporations, operational restructurings of undervalued businesses, and builds up. The firm seeks to invest in technology, electronics manufacturing services, industrial, aerospace, healthcare, retail, restaurants, industrials products, customer care services, metal services, building products, entertainment, gaming, cabinetry products, commercial vehicles, commercial and investment banking, financial services, commercial and multi-unit residential real estate. It invests in global businesses headquartered in North America, including United States and Canada, or Europe. The firm seeks to invest between $125 million and $1 billion in companies that have minimum revenues of $300 million. It does not consider size if the company is in an industry in which the firm already has presence. The firm seeks to make direct as well as co-investments through managed private equity, real estate and credit funds. It seeks to acquire a control position in its portfolio companies. Onex Corporation was founded in 1984 and is based in Toronto, Canada with additional offices in New York, New York; Englewood Cliffs, New Jersey; Boston, Massachusetts and London, United Kingdom.

About Great Elm Capital Group

Great Elm Capital Corp. is a business development company which specializes in loan and mezzanine, middle market investments. It invests in the debt instruments of middle market companies. The fund prefers to invest in media, commercial services and supplies, healthcare, telecommunication services, communications equipment. It typically makes equity investments between $3 million and $10 million in companies with revenues between $3 million and $75 million.