Stellus Capital Investment (NYSE:SCM – Get Free Report) and DigitalBridge Group (NYSE:DBRG – Get Free Report) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, dividends, risk and profitability.
Dividends
Stellus Capital Investment pays an annual dividend of $1.00 per share and has a dividend yield of 13.9%. DigitalBridge Group pays an annual dividend of $0.04 per share and has a dividend yield of 0.3%. Stellus Capital Investment pays out 98.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. DigitalBridge Group pays out 2.6% of its earnings in the form of a dividend.
Valuation and Earnings
This table compares Stellus Capital Investment and DigitalBridge Group”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Stellus Capital Investment | $102.14 million | 2.00 | $27.05 million | $1.02 | 7.05 |
| DigitalBridge Group | $374.45 million | 8.01 | $141.87 million | $1.54 | 10.39 |
DigitalBridge Group has higher revenue and earnings than Stellus Capital Investment. Stellus Capital Investment is trading at a lower price-to-earnings ratio than DigitalBridge Group, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Stellus Capital Investment has a beta of 0.71, meaning that its share price is 29% less volatile than the S&P 500. Comparatively, DigitalBridge Group has a beta of 1.45, meaning that its share price is 45% more volatile than the S&P 500.
Analyst Ratings
This is a summary of current ratings and price targets for Stellus Capital Investment and DigitalBridge Group, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Stellus Capital Investment | 1 | 2 | 1 | 0 | 2.00 |
| DigitalBridge Group | 1 | 7 | 1 | 0 | 2.00 |
Stellus Capital Investment currently has a consensus target price of $9.25, suggesting a potential upside of 28.65%. DigitalBridge Group has a consensus target price of $16.00, suggesting a potential upside of 0.00%. Given Stellus Capital Investment’s higher probable upside, analysts clearly believe Stellus Capital Investment is more favorable than DigitalBridge Group.
Profitability
This table compares Stellus Capital Investment and DigitalBridge Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Stellus Capital Investment | 30.66% | 9.09% | 3.32% |
| DigitalBridge Group | 49.79% | 6.31% | 3.03% |
Institutional and Insider Ownership
13.2% of Stellus Capital Investment shares are owned by institutional investors. Comparatively, 92.7% of DigitalBridge Group shares are owned by institutional investors. 4.2% of Stellus Capital Investment shares are owned by insiders. Comparatively, 3.4% of DigitalBridge Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Summary
DigitalBridge Group beats Stellus Capital Investment on 9 of the 14 factors compared between the two stocks.
About Stellus Capital Investment
Stellus Capital Investment Corporation is a business development company specializing in investments in private middle-market companies. It invests through first lien, second lien, unitranche, and mezzanine debt financing, often with a corresponding equity investment. The fund prefers to invest in US and Canada. The fund seeks to invest in companies with an EBITDA between $5 million and $50 million.
About DigitalBridge Group
DigitalBridge is an infrastructure investment firm specializing in digital infrastructure assets. They provide services to institutional investors. They primarily invest in data centers, cell towers, fiber networks, small cells, and edge infrastructure. DigitalBridge Group, Inc. was founded in 1991 and is headquartered in Boca Raton, Florida with additional offices in Los Angles, California, and New York New York.
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