Critical Contrast: Invesco California Value Municipal Income Trust (VCV) & Eagle Point Credit Company (ECC)

Invesco California Value Municipal Income Trust (NYSE: VCV) and Eagle Point Credit Company (NYSE:ECC) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, valuation, institutional ownership, risk, profitabiliy, dividends and analyst recommendations.

Insider and Institutional Ownership

11.7% of Invesco California Value Municipal Income Trust shares are held by institutional investors. Comparatively, 59.6% of Eagle Point Credit Company shares are held by institutional investors. 1.0% of Invesco California Value Municipal Income Trust shares are held by insiders. Comparatively, 0.7% of Eagle Point Credit Company shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Invesco California Value Municipal Income Trust and Eagle Point Credit Company’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Invesco California Value Municipal Income Trust N/A N/A N/A
Eagle Point Credit Company 159.47% N/A N/A

Dividends

Invesco California Value Municipal Income Trust pays an annual dividend of $0.70 per share and has a dividend yield of 5.5%. Eagle Point Credit Company pays an annual dividend of $2.40 per share and has a dividend yield of 11.6%. Eagle Point Credit Company pays out 39.2% of its earnings in the form of a dividend.

Earnings & Valuation

This table compares Invesco California Value Municipal Income Trust and Eagle Point Credit Company’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Invesco California Value Municipal Income Trust $44.28 million N/A N/A N/A N/A
Eagle Point Credit Company $58.17 million N/A N/A $6.13 3.38

Volatility & Risk

Invesco California Value Municipal Income Trust has a beta of -0.1, indicating that its stock price is 110% less volatile than the S&P 500. Comparatively, Eagle Point Credit Company has a beta of 0.34, indicating that its stock price is 66% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations for Invesco California Value Municipal Income Trust and Eagle Point Credit Company, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Invesco California Value Municipal Income Trust 0 0 0 0 N/A
Eagle Point Credit Company 0 1 4 0 2.80

Eagle Point Credit Company has a consensus target price of $21.00, indicating a potential upside of 1.50%. Given Eagle Point Credit Company’s higher possible upside, analysts plainly believe Eagle Point Credit Company is more favorable than Invesco California Value Municipal Income Trust.

Summary

Eagle Point Credit Company beats Invesco California Value Municipal Income Trust on 7 of the 9 factors compared between the two stocks.

About Invesco California Value Municipal Income Trust

Invesco Van Kampen California Value Municipal Income Trust (the Trust), formerly Invesco California Value Municipal Income Trust, is a diversified, closed-end management investment trust. The Trust’s investment objective is to seek to provide common shareholders with a high level of current income exempt from federal and California income taxes, consistent with preservation of capital. The Trust will invest substantially all of its assets in California municipal securities rated investment grade at the time of investment. The Trust seeks to achieve its investment objective by investing primarily in California municipal securities that are rated investment grade at the time of investment. Municipal securities include municipal bonds, municipal notes, municipal commercial paper and lease obligations. Invesco Advisers, Inc. serves as its investment advisor.

About Eagle Point Credit Company

Eagle Point Credit Company Inc. is a non-diversified, closed-end management investment company. The Company’s primary investment objective is to generate high current income, with a secondary objective to generate capital appreciation. The Company primarily invests in equity and junior debt tranches of collateralized loan obligations (CLOs) that are collateralized by a portfolio consisting primarily of the below investment grade United States senior secured loans. It may also invest in other securities and instruments related to these investments. The Company’s portfolio includes its investments in various industries, such as business equipment and services; healthcare; electronics/electrical; leisure goods/activities/movies; retailers (except food and drug); chemicals and plastics; telecommunications; financial intermediaries, and utilities. The Company’s advisor is Eagle Point Credit Management LLC.

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