Analyzing Elron Electronic Industries (ELRNF) & Prospect Capital (PSEC)

Elron Electronic Industries (OTCMKTS:ELRNF) and Prospect Capital (NASDAQ:PSEC) are both computer and technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their earnings, profitability, analyst recommendations, valuation, dividends, risk and institutional ownership.

Profitability

This table compares Elron Electronic Industries and Prospect Capital’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Elron Electronic Industries N/A -5.02% -4.66%
Prospect Capital 54.69% 9.11% 5.18%

Analyst Recommendations

This is a summary of current ratings for Elron Electronic Industries and Prospect Capital, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Elron Electronic Industries 0 0 0 0 N/A
Prospect Capital 1 1 0 0 1.50

Prospect Capital has a consensus target price of $5.50, suggesting a potential downside of 19.83%. Given Prospect Capital’s higher probable upside, analysts clearly believe Prospect Capital is more favorable than Elron Electronic Industries.

Valuation and Earnings

This table compares Elron Electronic Industries and Prospect Capital’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Elron Electronic Industries $11.97 million 7.08 -$25.48 million N/A N/A
Prospect Capital $607.01 million 4.13 $299.86 million $0.79 8.68

Prospect Capital has higher revenue and earnings than Elron Electronic Industries.

Volatility & Risk

Elron Electronic Industries has a beta of 0.05, indicating that its stock price is 95% less volatile than the S&P 500. Comparatively, Prospect Capital has a beta of 0.61, indicating that its stock price is 39% less volatile than the S&P 500.

Dividends

Prospect Capital pays an annual dividend of $0.72 per share and has a dividend yield of 10.5%. Elron Electronic Industries does not pay a dividend. Prospect Capital pays out 91.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Prospect Capital has raised its dividend for 7 consecutive years.

Insider & Institutional Ownership

13.1% of Prospect Capital shares are held by institutional investors. 10.2% of Prospect Capital 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.

Summary

Prospect Capital beats Elron Electronic Industries on 11 of the 13 factors compared between the two stocks.

Elron Electronic Industries Company Profile

Elron Electronic Industries Ltd., through its subsidiaries, provides technology products in the medical devices and cyber fields. The company offers BrainsGate, a minimally invasive treatment for ischemic stroke; Pocared, an automated microbiology lab system for infectious diseases diagnosis; CartiHeal implants for cartilage and bone repair in weight bearing joints; Notal Vision, a remote monitoring of patients at risk of vision loss from age-related macular degeneration; cyber intelligence platform that detects and defuses threats before they become cyberattacks; Alcide, a security and management tools for hybrid data centers; and SecuredTouch a behavioral biometrics for mobile transactions. It also provides Ironscales, an automated phishing prevention, detection, and response platform; Cynerio, a connected medical device; Kindite, a cloud encryption solution; OpenLegacy, a platform that enables the digital transformation process; PLYmedia, a platform for ad networks; Aqwise, a biological water and wastewater treatment solutions for the industrial and municipal markets; and Atlantium, a water disinfection solution. The company was founded in 1961 and is based in Tel Aviv, Israel. Elron Electronic Industries Ltd. is a subsidiary of Discount Investment Corporation Limited.

Prospect Capital Company Profile

Prospect Capital Corporation is a business development company. It specializes in middle market, mature, mezzanine finance, later stage, emerging growth, buyouts, recapitalizations, turnaround, growth capital, development, subordinated debt tranches of collateralized loan obligations, cash flow term loans, and bridge transactions. It also makes real estate investments particularly in multi-family residential real estate asset class. The fund makes secured debt, senior debt, unitranche debt, first-lien and second lien, private debt, mezzanine debt, and equity investments in private and microcap public businesses. It focuses on both primary origination and secondary loans/portfolios and invests in situations like debt financings for private equity sponsors, acquisitions, dividend recapitalizations, growth financings, bridge loans, cash flow term loans, real estate financings/investments. The fund typically invests across all industry sectors, with a particular expertise in the energy and industrial sectors. It invests in aerospace and defense, chemicals, conglomerate services, consumer services, ecological, electronics, financial services, machinery, manufacturing, media, pharmaceuticals, retail, software, specialty minerals, textiles and leather, transportation, oil and gas production, coal production, materials, industrials, consumer discretionary, information technology, utilities, pipeline, storage, power generation and distribution, renewable and clean energy, oilfield services, healthcare, food and beverage, education, business services, and other select sectors. It prefers to invest in the United States and Canada. The fund seeks to invest between $10 million to $500 million per transaction in companies with EBITDA between $5 million and $250 million, sales value between $25 million and $500 million, and enterprise value between $5 million and $1000 million. It fund also co-invests for larger deals. The fund seeks control acquisitions by providing multiple levels of the capital structure. The fund focuses on sole, agented, club, or syndicated deals.

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