Financial Analysis: Safeguard Scientifics (NYSE:SFE) & InvestcorpCreditManagementBDCInc . (NYSE:ICMB)

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

Profitability

This table compares Safeguard Scientifics and InvestcorpCreditManagementBDCInc .’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Safeguard Scientifics N/A 80.31% 43.32%
InvestcorpCreditManagementBDCInc . -42.28% 8.48% 4.20%



Dividends

InvestcorpCreditManagementBDCInc . pays an annual dividend of $1.00 per share and has a dividend yield of 14.9%. Safeguard Scientifics does not pay a dividend. InvestcorpCreditManagementBDCInc . pays out 101.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Institutional and Insider Ownership

68.0% of Safeguard Scientifics shares are owned by institutional investors. Comparatively, 44.5% of InvestcorpCreditManagementBDCInc . shares are owned by institutional investors. 6.2% of Safeguard Scientifics shares are owned by insiders. Comparatively, 1.9% of InvestcorpCreditManagementBDCInc . shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Volatility and Risk

Safeguard Scientifics has a beta of 0.87, suggesting that its stock price is 13% less volatile than the S&P 500. Comparatively, InvestcorpCreditManagementBDCInc . has a beta of 1.29, suggesting that its stock price is 29% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings for Safeguard Scientifics and InvestcorpCreditManagementBDCInc ., as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Safeguard Scientifics 0 0 0 0 N/A
InvestcorpCreditManagementBDCInc . 0 0 1 0 3.00

InvestcorpCreditManagementBDCInc . has a consensus target price of $9.00, suggesting a potential upside of 34.33%. Given InvestcorpCreditManagementBDCInc .’s higher possible upside, analysts plainly believe InvestcorpCreditManagementBDCInc . is more favorable than Safeguard Scientifics.

Valuation and Earnings

This table compares Safeguard Scientifics and InvestcorpCreditManagementBDCInc .’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Safeguard Scientifics N/A N/A -$15.63 million ($0.76) -16.22
InvestcorpCreditManagementBDCInc . $34.40 million 2.65 -$14.54 million $0.99 6.77

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

Summary

InvestcorpCreditManagementBDCInc . beats Safeguard Scientifics on 8 of the 14 factors compared between the two stocks.

Safeguard Scientifics Company Profile

Safeguard Scientifics, Inc. no longer investing. It is a private equity and venture capital firm specializing in expansion financings, growth capital, management buyouts, recapitalizations, industry consolidations, corporate spinouts, growth stage, and early stage financings. It initially invests in a Series A-C round and opportunistically in a seed round. The firm prefers to make investments in companies engaged in the technology, financial services, and healthcare sector. Within the technology sector, it invests in software as a service, adtech / digital media, Internet of Everything, enhanced security, predictive analytics, machine learning, artificial intelligence, enterprise software, technology enabled services, internet/new media, financial technology, cloud, mobile, social, big data, in memory, and selected business services with capital requirements of up to $25 million. Within healthcare sector, the firm invests in molecular and point-of-care diagnostics, medical devices, regenerative medicine, medical technology, digital health, healthcare technology, specialty pharmaceuticals, and selected healthcare services. It invests throughout the United States with a focus on Mid-Atlantic region, and Southeastern Canada. The firm primarily invests between $5 million and $25 million in growth equity financing and between $5 million and $10 million in early-stage financing. It typically invests in the capital structures including owner financed and bootstrapped companies, corporate division or business unit, and venture capital-backed seeking a growth partner. The firm prefers to be the largest shareholder in its portfolio companies, with ownership in the range of 20 percent to 50 percent. However, it may occasionally take a majority or smaller stake in its portfolio companies. It prefers to invest in companies having proprietary technology and intellectual property. The firm prefers to take a Board seat in its portfolio companies. The company was founded in 1953 as Lancaster Corporation and changed its name to Safeguard Scientifics, Inc. in 1981. Safeguard Scientifics, Inc. is based in Radnor, Pennsylvania with an additional office in Weston, Massachusetts.

InvestcorpCreditManagementBDCInc . Company Profile

CM Finance Inc. is a business development company specializing in loan, mezzanine, middle market, growth capital, and recapitalization investments. The fund typically invests in United States and Europe. Within United States, the fund seeks to invest in Midatlantic, Midwest, Northeast, Southeast, and West Coast regions. The fund primarily invests in cable and satellites; consumer services; healthcare equipment and services; industrials; information technology; telecommunication services; and utilities sectors. The fund seeks to invest in companies with EBITDA more than $15 million. The fund is based in New York, New York.

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