Head-To-Head Contrast: Investcorp Credit Management BDC (NASDAQ:ICMB) versus CION Investment (NYSE:CION)

Investcorp Credit Management BDC (NASDAQ:ICMB – Get Free Report) and CION Investment (NYSE:CION – Get Free Report) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, earnings, risk, institutional ownership, profitability, analyst recommendations and valuation.

Risk & Volatility

Investcorp Credit Management BDC has a beta of 0.41, indicating that its share price is 59% less volatile than the S&P 500. Comparatively, CION Investment has a beta of 1.07, indicating that its share price is 7% more volatile than the S&P 500.

Valuation and Earnings

This table compares Investcorp Credit Management BDC and CION Investment”s top-line revenue, earnings per share (EPS) and valuation.

CION Investment has higher revenue and earnings than Investcorp Credit Management BDC. Investcorp Credit Management BDC is trading at a lower price-to-earnings ratio than CION Investment, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Investcorp Credit Management BDC and CION Investment’s net margins, return on equity and return on assets.

Analyst Ratings

This is a summary of current ratings and price targets for Investcorp Credit Management BDC and CION Investment, as provided by MarketBeat.

CION Investment has a consensus target price of $8.50, suggesting a potential downside of 12.01%. Given CION Investment’s stronger consensus rating and higher possible upside, analysts plainly believe CION Investment is more favorable than Investcorp Credit Management BDC.

Dividends

Investcorp Credit Management BDC pays an annual dividend of $0.48 per share and has a dividend yield of 17.8%. CION Investment pays an annual dividend of $1.44 per share and has a dividend yield of 14.9%. Investcorp Credit Management BDC pays out -4,800.0% of its earnings in the form of a dividend. CION Investment pays out 282.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Investcorp Credit Management BDC has raised its dividend for 1 consecutive years and CION Investment has raised its dividend for 1 consecutive years. Investcorp Credit Management BDC is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider and Institutional Ownership

7.8% of Investcorp Credit Management BDC shares are owned by institutional investors. Comparatively, 32.0% of CION Investment shares are owned by institutional investors. 1.3% of Investcorp Credit Management BDC shares are owned by company insiders. Comparatively, 0.6% of CION Investment shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

CION Investment beats Investcorp Credit Management BDC on 13 of the 16 factors compared between the two stocks.

About Investcorp Credit Management BDC

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Investcorp Credit Management BDC, Inc. is a business development company specializing in loan, mezzanine, middle market, growth capital, acquisitions, market/product expansion, organic growth, refinancings and recapitalization investments. It also selectively invests in mezzanine loans/structured equity and in the equity of portfolio companies through warrants and other instruments, in most cases taking such upside participation interests as part of a broader investment relationship. 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 between $5 million to $25 million in companies that have annual revenues of at least $50 million with EBITDA at least $15 million.

About CION Investment

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CION Investment Corporation is a business development company. It specializes in investments in senior secured loans, including unitranche loans, First Lien, second lien loans, long-term subordinated loans, and mezzanine loans; equity interests such as warrants or options; and corporate bonds; and other debt securities in middle-market companies. The firm invests in growth capital, acquisitions, leveraged buyouts, market/product expansion, refinancing and recapitalization. The fund also invests up to 30 percent of their assets opportunistically in other types of investments, including the securities of larger public companies and foreign securities. It also makes investments in the secondary loan market. The fund does not invest in start-up companies, turnaround situations, or companies with speculative business plans. The fund prefers to invest in high tech industries, healthcare, pharmaceuticals, business services, media, chemicals, plastic, rubber, telecommunication, consumer services, advertising, printing and publishing, consumer goods, durables, diversified financials, and other industries. It also invests in homebuilding, restaurants, beverage and tobacco bars, broadcasting, distributors, Non-durable good distribution, food beverage and tobacco, energy, oil gas and consumables fuels, insurance, aerospace and defense, industrial machinery, paper and forest product machinery, information technology, metals and mining, and real estate. It primarily seeks to invest in the United States. The fund seeks to invest between $5 million and $50 million in companies with an EBITDA between $25 million and $75 million with average targeted hold of $25 million. It also purchases minority interests in the form of common or preferred equity in the target companies, typically in conjunction with its debt investments or through a co-investment with a financial sponsor. The fund seeks to exit its investments through an initial public offering of common stock, a merger, a sale, or other recapitalization.