Elme Communities (NYSE:ELME – Get Free Report) and Portman Ridge Finance (NASDAQ:BCIC – Get Free Report) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, valuation, analyst recommendations, risk, earnings, dividends and institutional ownership.
Profitability
This table compares Elme Communities and Portman Ridge Finance’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Elme Communities | N/A | N/A | N/A |
| Portman Ridge Finance | -5.72% | 14.09% | 5.44% |
Earnings & Valuation
This table compares Elme Communities and Portman Ridge Finance”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Elme Communities | $206.36 million | 0.76 | -$154.16 million | ($1.52) | -1.15 |
| Portman Ridge Finance | $2.90 million | 29.58 | $11.49 million | ($0.55) | -12.60 |
Portman Ridge Finance has lower revenue, but higher earnings than Elme Communities. Portman Ridge Finance is trading at a lower price-to-earnings ratio than Elme Communities, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a breakdown of recent ratings and recommmendations for Elme Communities and Portman Ridge Finance, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Elme Communities | 1 | 2 | 0 | 0 | 1.67 |
| Portman Ridge Finance | 2 | 3 | 0 | 0 | 1.60 |
Elme Communities currently has a consensus target price of $18.00, suggesting a potential upside of 925.64%. Portman Ridge Finance has a consensus target price of $9.25, suggesting a potential upside of 33.48%. Given Elme Communities’ stronger consensus rating and higher probable upside, analysts plainly believe Elme Communities is more favorable than Portman Ridge Finance.
Risk & Volatility
Elme Communities has a beta of 0.73, meaning that its share price is 27% less volatile than the S&P 500. Comparatively, Portman Ridge Finance has a beta of 0.53, meaning that its share price is 47% less volatile than the S&P 500.
Insider and Institutional Ownership
87.9% of Elme Communities shares are held by institutional investors. Comparatively, 30.1% of Portman Ridge Finance shares are held by institutional investors. 1.4% of Elme Communities shares are held by company insiders. Comparatively, 1.3% of Portman Ridge Finance 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.
Summary
Elme Communities beats Portman Ridge Finance on 8 of the 13 factors compared between the two stocks.
About Elme Communities
Elme Communities is committed to elevating what home can be for middle-income renters by providing a higher level of quality, service, and experience. The Company is a multifamily real estate investment trust that owns and operates approximately 9,400 apartment homes in the Washington, DC metro and the Atlanta metro regions, and owns approximately 300,000 square feet of commercial space. Focused on providing quality, affordable homes to a deep, solid, and underserved base of mid-market demand, Elme Communities is building long-term value for shareholders.
About Portman Ridge Finance
Portman Ridge Finance Corporation is a business development company specializing in investments in unitranche loans (including last out), first lien loans, second lien loans, subordinated debt, equity co-investment, buyout in middle market companies. It also makes acquisitions in businesses complementary to the firm’s business. It primarily invests in healthcare, cargo transport, manufacturing, industrial & environmental services, logistics & distribution, media & telecommunications, real estate, education, automotive, agriculture, aerospace/defense, packaging, electronics, finance, non-durable consumer, consumer products, business services, utilities, insurance, and food and beverage sectors. The fund typically invests $1 million to $20 million in its portfolio companies. It provides senior secured term loans from $2 million to $20 million maturing in five to seven years; second lien term loans from $5 million to $15 million maturing in six to eight years; senior unsecured loans $5 million to $23 million maturing in six to eight years; mezzanine loans from $5 million to $15 million maturing in seven to ten years; and equity investments from $1 to $5 million. The fund targets the companies with EBITDA between $5 million and $25 million. While investing in debt securities, it invests in those middle market firms with EBITDA between $10 million and $50 million and/or total debt between $25 million and $150 million. It invests in minority, and majority or control equity positions alongside its private equity sponsor partners.
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