NIPPON STEEL & SUM (OTCMKTS: NSSMY) and Eagle Point Credit (NYSE:ECC) are both basic materials companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, analyst recommendations, risk, earnings, profitability, institutional ownership and valuation.
Insider and Institutional Ownership
0.0% of NIPPON STEEL & SUM shares are owned by institutional investors. Comparatively, 57.1% of Eagle Point Credit shares are owned by institutional investors. 0.6% of Eagle Point Credit shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
NIPPON STEEL & SUM has a beta of 1.39, meaning that its stock price is 39% more volatile than the S&P 500. Comparatively, Eagle Point Credit has a beta of 0.2, meaning that its stock price is 80% less volatile than the S&P 500.
Earnings & Valuation
This table compares NIPPON STEEL & SUM and Eagle Point Credit’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|NIPPON STEEL & SUM||$42.85 billion||0.49||$1.22 billion||$1.30||16.99|
|Eagle Point Credit||$65.29 million||5.32||$31.13 million||$1.88||9.84|
NIPPON STEEL & SUM has higher revenue and earnings than Eagle Point Credit. Eagle Point Credit is trading at a lower price-to-earnings ratio than NIPPON STEEL & SUM, indicating that it is currently the more affordable of the two stocks.
This is a summary of recent recommendations for NIPPON STEEL & SUM and Eagle Point Credit, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|NIPPON STEEL & SUM||0||0||0||0||N/A|
|Eagle Point Credit||0||0||4||0||3.00|
Eagle Point Credit has a consensus target price of $21.13, indicating a potential upside of 14.25%. Given Eagle Point Credit’s higher possible upside, analysts clearly believe Eagle Point Credit is more favorable than NIPPON STEEL & SUM.
This table compares NIPPON STEEL & SUM and Eagle Point Credit’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|NIPPON STEEL & SUM||4.16%||5.62%||2.55%|
|Eagle Point Credit||47.68%||10.46%||7.06%|
NIPPON STEEL & SUM pays an annual dividend of $0.20 per share and has a dividend yield of 0.9%. Eagle Point Credit pays an annual dividend of $2.40 per share and has a dividend yield of 13.0%. NIPPON STEEL & SUM pays out 15.4% of its earnings in the form of a dividend. Eagle Point Credit pays out 127.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Eagle Point Credit beats NIPPON STEEL & SUM on 10 of the 15 factors compared between the two stocks.
About NIPPON STEEL & SUM
Nippon Steel & Sumitomo Metal Corporation engages in steelmaking and steel fabrication businesses worldwide. The company operates through Steelmaking and Steel Fabrication, Engineering and Construction, Chemicals, New Materials, and System Solutions segments. It offers steel plates; steel sheets, such as hot-dip coated and electroplated steel sheets, tin plates, and electrical steel sheets; bar and rod materials; and structural steel products. The company also provides pipes and tubes; railway parts, including railway wheels, axles, couplers, bogie trucks, brake discs, control bogies, brake calipers, and test equipment; automotive and construction machinery parts, such as crankshafts and front axles, aluminum wheels, and permanent magnet retarders; and industrial machinery parts comprising die materials, mill rolls, curved forgings, steel forgings, and shape-memory alloys. In addition, it provides titanium products for use in heat exchangers, automobiles, construction materials, consumer products, electric power, and desalination fields; stainless steel products comprising plates, sheets, formed steel, bars, wire rods, clad steel sheets, stainless steel foils, and nickel products; and steel slags. Further, the company performs construction work under contract; and engages in waste processing and recycling activities, as well as in supplying electricity, gas, and heat. Additionally, it offers coal-based chemical products and petrochemicals, as well as electronic materials for industrial and high-function applications, as well as in other areas; and materials for semiconductors and electronic parts, carbon fiber and composite products, and products that apply technologies for metal processing and joining. The company also provides solutions in the planning, configuration, operation, and maintenance of IT systems for clients in a range of business fields. The company was founded in 1949 and is headquartered in Tokyo, Japan.
About Eagle Point Credit
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.
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