Analyzing WhiteHorse Finance (NASDAQ:WHF) & The European Equity Fund (NYSE:EEA)

The European Equity Fund (NYSE:EEA) and WhiteHorse Finance (NASDAQ:WHF) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, analyst recommendations, institutional ownership, risk, earnings, valuation and dividends.

Valuation & Earnings

This table compares The European Equity Fund and WhiteHorse Finance”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
The European Equity Fund	N/A	N/A	N/A	N/A	N/A
WhiteHorse Finance	$103.26 million	2.32	$20.41 million	$0.45	22.93

WhiteHorse Finance has higher revenue and earnings than The European Equity Fund.

Risk and Volatility

The European Equity Fund has a beta of 1.11, meaning that its stock price is 11% more volatile than the S&P 500. Comparatively, WhiteHorse Finance has a beta of 1.25, meaning that its stock price is 25% more volatile than the S&P 500.

Institutional & Insider Ownership

51.9% of The European Equity Fund shares are owned by institutional investors. Comparatively, 13.2% of WhiteHorse Finance shares are owned by institutional investors. 0.1% of The European Equity Fund shares are owned by insiders. Comparatively, 2.3% of WhiteHorse Finance shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current recommendations and price targets for The European Equity Fund and WhiteHorse Finance, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
The European Equity Fund	0	0	0	0	0.00
WhiteHorse Finance	1	2	0	0	1.67

WhiteHorse Finance has a consensus price target of $11.75, suggesting a potential upside of 13.89%. Given WhiteHorse Finance’s stronger consensus rating and higher probable upside, analysts clearly believe WhiteHorse Finance is more favorable than The European Equity Fund.

Dividends

The European Equity Fund pays an annual dividend of $0.18 per share and has a dividend yield of 2.1%. WhiteHorse Finance pays an annual dividend of $1.54 per share and has a dividend yield of 14.9%. WhiteHorse Finance pays out 342.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares The European Equity Fund and WhiteHorse Finance’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
The European Equity Fund	N/A	N/A	N/A
WhiteHorse Finance	10.65%	12.86%	5.59%

Summary

WhiteHorse Finance beats The European Equity Fund on 9 of the 11 factors compared between the two stocks.

About The European Equity Fund

The European Equity Fund, Inc. is a closed ended equity mutual fund launched by Deutsche Investment Management Americas Inc. The fund is managed by Deutsche Asset Management International GmbH. It invests in the public equity markets of Europe. The fund seeks to invest in the stocks of companies operating across diversified sectors. It primarily invests in equity or equity-linked securities of companies. The fund seeks to benchmark the performance of its portfolio against the MSCI-EMU Index. It was formerly known as Germany Fund Inc. The European Equity Fund, Inc. was formed on July 23, 1986 and is domiciled in the United States.

About WhiteHorse Finance

WhiteHorse Finance, Inc. is business development company, non-diversified, closed end management company specializing in originating senior secured loans, lower middle market, growth capital industries. It invests in broadline retail, office services and supplies, building products, health care services, health care supplies, research and consulting services, application software, home furnishings, specialized consumer services, data processing and outsourced services, leisure facilities, cable, and satellite. It prefers to invest in United States. It typically invests between $5 million to $25 million in companies having enterprise value of between $50 million and $350 million.