Harvest Capital Credit (NASDAQ:HCAP) and Weidai (NYSE:WEI) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, profitability, valuation, institutional ownership, dividends, risk and analyst recommendations.

Dividends

Harvest Capital Credit pays an annual dividend of $0.96 per share and has a dividend yield of 9.2%. Weidai does not pay a dividend. Harvest Capital Credit pays out 103.2% 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

9.3% of Harvest Capital Credit shares are held by institutional investors. Comparatively, 0.8% of Weidai shares are held by institutional investors. 13.4% of Harvest Capital Credit shares are held 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.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Harvest Capital Credit and Weidai, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Harvest Capital Credit 0 0 0 0 N/A
Weidai 0 0 2 0 3.00

Weidai has a consensus price target of $13.00, suggesting a potential upside of 30.51%. Given Weidai’s higher probable upside, analysts plainly believe Weidai is more favorable than Harvest Capital Credit.

Profitability

This table compares Harvest Capital Credit and Weidai’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Harvest Capital Credit 31.31% 7.51% 4.64%
Weidai N/A N/A N/A

Earnings and Valuation

This table compares Harvest Capital Credit and Weidai’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Harvest Capital Credit $16.18 million 3.96 $5.07 million $0.93 11.17
Weidai $569.19 million 1.22 $87.50 million $1.59 6.26

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

Summary

Harvest Capital Credit beats Weidai on 8 of the 14 factors compared between the two stocks.

About Harvest Capital Credit

Harvest Capital Credit Corporation is a business development company providing structured credit to small businesses and specializing in leveraged buyouts, add-on acquisitions, recapitalizations, growth financings and debt refinancing investments. It prefers to invest in North America-based companies. The firm invest in multiple layers of a company's capital structure, from senior secured debt to subordinated debt and minority equity capital. The firm typically invests in companies with target equity size of $250k to $1 million and target loan size of $2 million to $15 million, having revenue between $10 million and $100 million with at least $1.5 million of annual EBITDA. Harvest Capital Credit Corporation was founded in 2012 and is based in New York, New York.

About Weidai

Weidai Ltd., through its subsidiaries, provides auto-backed financing solutions in the People's Republic of China. Its auto-backed financing platform connects borrowers primarily mall and micro enterprise owners with online investors and institutional funding partners. The company was founded in 2011 and is headquartered in Hangzhou, the People's Republic of China.

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