Comparing New Mountain Finance Corporation (NMFC) & Its Rivals

New Mountain Finance Corporation (NYSE: NMFC) is one of 589 publicly-traded companies in the “Closed End Funds” industry, but how does it compare to its competitors? We will compare New Mountain Finance Corporation to related businesses based on the strength of its profitability, institutional ownership, risk, earnings, analyst recommendations, valuation and dividends.

Risk & Volatility

New Mountain Finance Corporation has a beta of 0.59, suggesting that its stock price is 41% less volatile than the S&P 500. Comparatively, New Mountain Finance Corporation’s competitors have a beta of 0.56, suggesting that their average stock price is 44% less volatile than the S&P 500.

Profitability

This table compares New Mountain Finance Corporation and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
New Mountain Finance Corporation 61.81% 10.14% 5.38%
New Mountain Finance Corporation Competitors -36.20% 6.63% 5.14%

Earnings and Valuation

This table compares New Mountain Finance Corporation and its competitors top-line revenue, earnings per share and valuation.

Gross Revenue NetIncome Price/Earnings Ratio
New Mountain Finance Corporation $168.08 million $111.67 million 9.30
New Mountain Finance Corporation Competitors $238.79 million $43.51 million 144.41

New Mountain Finance Corporation’s competitors have higher revenue, but lower earnings than New Mountain Finance Corporation. New Mountain Finance Corporation is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Institutional & Insider Ownership

40.6% of New Mountain Finance Corporation shares are held by institutional investors. Comparatively, 24.0% of shares of all “Closed End Funds” companies are held by institutional investors. 9.7% of New Mountain Finance Corporation shares are held by company insiders. Comparatively, 4.2% of shares of all “Closed End Funds” companies are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

New Mountain Finance Corporation pays an annual dividend of $1.36 per share and has a dividend yield of 9.7%. New Mountain Finance Corporation pays out 90.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Closed End Funds” companies pay a dividend yield of 8.5% and pay out 95.1% of their earnings in the form of a dividend. New Mountain Finance Corporation is clearly a better dividend stock than its competitors, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a breakdown of current ratings and target prices for New Mountain Finance Corporation and its competitors, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
New Mountain Finance Corporation 0 1 0 0 2.00
New Mountain Finance Corporation Competitors 231 1559 1907 31 2.47

New Mountain Finance Corporation currently has a consensus target price of $15.00, indicating a potential upside of 6.76%. As a group, “Closed End Funds” companies have a potential upside of 88.48%. Given New Mountain Finance Corporation’s competitors stronger consensus rating and higher possible upside, analysts clearly believe New Mountain Finance Corporation has less favorable growth aspects than its competitors.

Summary

New Mountain Finance Corporation beats its competitors on 9 of the 15 factors compared.

About New Mountain Finance Corporation

New Mountain Finance Corporation is a closed-end, non-diversified management investment company. The Company’s investment objective is to generate current income and capital appreciation through the sourcing and origination of debt securities at all levels of the capital structure, including first and second lien debt, notes, bonds and mezzanine securities. Its investments may also include equity interests, such as preferred stock, common stock, warrants or options received in connection with its debt investments or may include a direct investment in the equity of private companies. The Company makes investments through both primary originations and open-market secondary purchases. Its investment portfolio includes its investments in various industries, such as business services, software, consumer services, investment fund, education, energy, healthcare services, distribution and logistics, and Federal services. Its investment advisor is New Mountain Finance Advisers BDC, L.L.C.

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