Contrasting Ampal American Israel (OTCMKTS:AMPLQ) & KCAP Financial (OTCMKTS:KCAP)

KCAP Financial (NASDAQ:KCAP) and Ampal American Israel (OTCMKTS:AMPLQ) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, valuation, risk, profitability and institutional ownership.

Insider and Institutional Ownership

27.6% of KCAP Financial shares are held by institutional investors. 8.1% of KCAP Financial shares are held by insiders. Comparatively, 63.4% of Ampal American Israel shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Volatility and Risk

KCAP Financial has a beta of 0.97, meaning that its stock price is 3% less volatile than the S&P 500. Comparatively, Ampal American Israel has a beta of -9.97, meaning that its stock price is 1,097% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for KCAP Financial and Ampal American Israel, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
KCAP Financial 0 1 0 0 2.00
Ampal American Israel 0 0 0 0 N/A

KCAP Financial currently has a consensus price target of $3.00, indicating a potential upside of 33.33%.

Valuation & Earnings

This table compares KCAP Financial and Ampal American Israel’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
KCAP Financial $27.09 million 3.10 -$9.57 million $0.27 8.33
Ampal American Israel N/A N/A N/A N/A N/A

Ampal American Israel has lower revenue, but higher earnings than KCAP Financial.

Dividends

KCAP Financial pays an annual dividend of $0.40 per share and has a dividend yield of 17.8%. Ampal American Israel does not pay a dividend. KCAP Financial pays out 148.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares KCAP Financial and Ampal American Israel’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
KCAP Financial -35.34% 5.81% 3.52%
Ampal American Israel N/A N/A N/A

Summary

KCAP Financial beats Ampal American Israel on 6 of the 9 factors compared between the two stocks.

KCAP Financial Company Profile

KCAP Financial, Inc. is a business development company specializing in investments in debt securities portfolio, asset manager affiliates, and CLO fund securities. The firm prefers to invest in senior secured term loans, mezzanine debt, and equity securities primarily in privately-held middle market, and buyout companies. It also invests in debt and subordinated securities issued by CLO Fund Securities. The firm also makes investments in CLO Fund Securities managed by asset managers. Its investments under CLO Fund Securities comprises of minority investment in the subordinated securities or preferred stock of CLO Funds raised and managed by firm's Asset Manager Affiliates. The firm also invests in other investments such as loans to larger, publicly-traded companies, high-yield bonds and distressed debt securities. It also invests in first and second lien term loans. The firm also prefers to invest in secured and unsecured subordinated debt. It also makes acquisitions in businesses complementary to the firm's business. It primarily invests in healthcare, cargo transport, manufacturing, real estate, educate, automotive, agriculture, aerospace/defence, packaging, electronics, finance, non-durable consumer, utilities, insurance, and food and beverage sectors. The firm 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 firm targets the companies with EBITDA between $7.5 million and $50 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. The firm invests through its own balance sheet. KCAP Financial, Inc. was founded in August 2006 and is based in New York, New York.

Ampal American Israel Company Profile

Ampal-American Israel Corp. is engaged in acquiring interests of businesses in the state of israel of that are israel-related. The company investment principally focus on companies and ventures. It operates in five segments: chemical, energy, real estate rental, leisure-time and finance. The company was founded in 1942 and is headquartered in Herzliya, Israel.

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