Is Great Elm Capital Corp. overvalued or undervalued?

As of 3 August 2023, the valuation grade for Great Elm Capital Corp. has moved from does not qualify to very attractive, indicating a significant improvement in its investment appeal. The company appears undervalued, particularly when considering its P/E ratio of 28, which, while higher than some peers, is offset by a low price-to-book value of 0.93 and an impressive dividend yield of 903.47%.
In comparison to its peers, Great Elm Capital Corp. has a P/E ratio that is higher than Medallion Financial Corp. at 6.39 and SuRo Capital Corp. at 3.70, but its EV/EBITDA of 5.77 is competitive against the industry. Notably, the company's recent stock performance has lagged behind the S&P 500, with a 1-year return of 13.70% compared to the benchmark's 17.14%, and a stark decline of 46.00% over the past five years, suggesting that while the stock may be undervalued, it has struggled to keep pace with broader market trends.