Eagle Point Credit (NYSE:ECC) versus BlackRock (NYSE:BLK) Financial Analysis

Eagle Point Credit (NYSE:ECC) and BlackRock (NYSE:BLK) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, institutional ownership, dividends, analyst recommendations, profitability, valuation and risk.

Profitability

This table compares Eagle Point Credit and BlackRock’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Eagle Point Credit	12.33%	13.47%	8.14%
BlackRock	24.40%	14.74%	4.95%

Dividends

Eagle Point Credit pays an annual dividend of $1.52 per share and has a dividend yield of 37.1%. BlackRock pays an annual dividend of $22.92 per share and has a dividend yield of 2.3%. Eagle Point Credit pays out 160.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. BlackRock pays out 57.5% of its earnings in the form of a dividend. BlackRock has increased its dividend for 16 consecutive years.

Analyst Ratings

This is a summary of recent recommendations and price targets for Eagle Point Credit and BlackRock, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Eagle Point Credit	0	2	3	0	2.60
BlackRock	0	3	16	1	2.90

Eagle Point Credit presently has a consensus price target of $6.50, suggesting a potential upside of 58.73%. BlackRock has a consensus price target of $1,269.06, suggesting a potential upside of 27.94%. Given Eagle Point Credit’s higher possible upside, equities research analysts clearly believe Eagle Point Credit is more favorable than BlackRock.

Valuation & Earnings

This table compares Eagle Point Credit and BlackRock”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Eagle Point Credit	$203.99 million	2.65	-$115.00 million	$0.95	4.31
BlackRock	$24.22 billion	6.36	$5.55 billion	$39.84	24.90

BlackRock has higher revenue and earnings than Eagle Point Credit. Eagle Point Credit is trading at a lower price-to-earnings ratio than BlackRock, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

19.5% of Eagle Point Credit shares are held by institutional investors. Comparatively, 80.7% of BlackRock shares are held by institutional investors. 0.3% of Eagle Point Credit shares are held by company insiders. Comparatively, 1.9% of BlackRock shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Risk and Volatility

Eagle Point Credit has a beta of 0.35, meaning that its share price is 65% less volatile than the S&P 500. Comparatively, BlackRock has a beta of 1.42, meaning that its share price is 42% more volatile than the S&P 500.

Summary

BlackRock beats Eagle Point Credit on 15 of the 18 factors compared between the two stocks.

About Eagle Point Credit

Eagle Point Credit Company Inc. is a closed ended fund launched and managed by Eagle Point Credit Management LLC. It invests in fixed income markets of the United States. The fund invests equity and junior debt tranches of collateralized loan obligations consisting primarily of below investment grade U.S. senior secured loans. Eagle Point Credit Company Inc. was formed on March 24, 2014 and is domiciled in the United States.

About BlackRock

BlackRock, Inc. is a publicly owned investment manager. The firm primarily provides its services to institutional, intermediary, and individual investors including corporate, public, union, and industry pension plans, insurance companies, third-party mutual funds, endowments, public institutions, governments, foundations, charities, sovereign wealth funds, corporations, official institutions, and banks. It also provides global risk management and advisory services. The firm manages separate client-focused equity, fixed income, and balanced portfolios. It also launches and manages open-end and closed-end mutual funds, offshore funds, unit trusts, and alternative investment vehicles including structured funds. The firm launches equity, fixed income, balanced, and real estate mutual funds. It also launches equity, fixed income, balanced, currency, commodity, and multi-asset exchange traded funds. The firm also launches and manages hedge funds. It invests in the public equity, fixed income, real estate, currency, commodity, and alternative markets across the globe. The firm primarily invests in growth and value stocks of small-cap, mid-cap, SMID-cap, large-cap, and multi-cap companies. It also invests in dividend-paying equity securities. The firm invests in investment grade municipal securities, government securities including securities issued or guaranteed by a government or a government agency or instrumentality, corporate bonds, and asset-backed and mortgage-backed securities. It employs fundamental and quantitative analysis with a focus on bottom-up and top-down approach to make its investments. The firm employs liquidity, asset allocation, balanced, real estate, and alternative strategies to make its investments. In real estate sector, it seeks to invest in Poland and Germany. The firm benchmarks the performance of its portfolios against various S&P, Russell, Barclays, MSCI, Citigroup, and Merrill Lynch indices. BlackRock, Inc. was founded in 1988 and is based in New York City with additional offices in Boston, Massachusetts; London, United Kingdom; Gurgaon, India; Hong Kong; Greenwich, Connecticut; Princeton, New Jersey; Edinburgh, United Kingdom; Sydney, Australia; Taipei, Taiwan; Singapore; Sao Paulo, Brazil; Philadelphia, Pennsylvania; Washington, District of Columbia; Toronto, Canada; Wilmington, Delaware; and San Francisco, California.