New Mountain Finance Corporation (NYSE: NMFC) is one of 565 publicly-traded companies in the “Closed End Funds” industry, but how does it weigh in compared to its rivals? We will compare New Mountain Finance Corporation to similar businesses based on the strength of its valuation, dividends, risk, profitability, analyst recommendations, institutional ownership and earnings.

Dividends

New Mountain Finance Corporation pays an annual dividend of $1.36 per share and has a dividend yield of 9.5%. New Mountain Finance Corporation pays out 86.6% 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 8.8% and pay out 87.0% of their earnings in the form of a dividend. New Mountain Finance Corporation is clearly a better dividend stock than its rivals, given its higher yield and lower payout ratio.

Risk & Volatility

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

Earnings and Valuation

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

Gross Revenue EBITDA Price/Earnings Ratio
New Mountain Finance Corporation N/A N/A 9.08
New Mountain Finance Corporation Competitors $57.58 million $38.86 million -0.14

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

Insider & Institutional Ownership

40.7% of New Mountain Finance Corporation shares are held by institutional investors. Comparatively, 23.2% of shares of all “Closed End Funds” companies are held by institutional investors. 9.7% of New Mountain Finance Corporation shares are held by insiders. Comparatively, 4.5% of shares of all “Closed End Funds” companies are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

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

Net Margins Return on Equity Return on Assets
New Mountain Finance Corporation 65.22% 10.15% 5.38%
New Mountain Finance Corporation Competitors 31.55% 6.47% 4.95%

Analyst Recommendations

This is a summary of current ratings and target prices for New Mountain Finance Corporation and its rivals, as reported by MarketBeat.com.

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 345 1483 1511 26 2.36

New Mountain Finance Corporation presently has a consensus target price of $15.00, suggesting a potential upside of 5.26%. As a group, “Closed End Funds” companies have a potential upside of 39.77%. Given New Mountain Finance Corporation’s rivals stronger consensus rating and higher possible upside, analysts clearly believe New Mountain Finance Corporation has less favorable growth aspects than its rivals.

Summary

New Mountain Finance Corporation beats its rivals on 9 of the 14 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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