Reviewing Nuveen Churchill Direct Lending (NYSE:NCDL) and CION Investment (NYSE:CION)

Nuveen Churchill Direct Lending (NYSE:NCDL) and CION Investment (NYSE:CION) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, profitability, earnings, dividends, valuation, analyst recommendations and institutional ownership.

Volatility & Risk

Nuveen Churchill Direct Lending has a beta of 0.36, meaning that its stock price is 64% less volatile than the S&P 500. Comparatively, CION Investment has a beta of 1.08, meaning that its stock price is 8% more volatile than the S&P 500.

Dividends

Nuveen Churchill Direct Lending pays an annual dividend of $1.80 per share and has a dividend yield of 12.9%. CION Investment pays an annual dividend of $1.44 per share and has a dividend yield of 15.1%. Nuveen Churchill Direct Lending pays out 98.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CION Investment pays out -757.9% of its earnings in the form of a dividend. CION Investment has increased its dividend for 1 consecutive years. CION Investment is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Nuveen Churchill Direct Lending and CION Investment, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nuveen Churchill Direct Lending	0	3	1	0	2.25
CION Investment	1	2	0	1	2.25

Nuveen Churchill Direct Lending presently has a consensus target price of $16.63, indicating a potential upside of 18.71%. CION Investment has a consensus target price of $10.75, indicating a potential upside of 12.92%. Given Nuveen Churchill Direct Lending’s higher possible upside, equities research analysts clearly believe Nuveen Churchill Direct Lending is more favorable than CION Investment.

Earnings & Valuation

This table compares Nuveen Churchill Direct Lending and CION Investment”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nuveen Churchill Direct Lending	$224.04 million	3.09	$116.32 million	$1.82	7.70
CION Investment	$252.43 million	1.96	$33.90 million	($0.19)	-50.11

Nuveen Churchill Direct Lending has higher earnings, but lower revenue than CION Investment. CION Investment is trading at a lower price-to-earnings ratio than Nuveen Churchill Direct Lending, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Nuveen Churchill Direct Lending and CION Investment’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nuveen Churchill Direct Lending	43.35%	11.88%	5.25%
CION Investment	-4.57%	9.63%	4.00%

Institutional and Insider Ownership

32.0% of CION Investment shares are held by institutional investors. 0.6% of Nuveen Churchill Direct Lending shares are held by insiders. Comparatively, 0.6% of CION Investment shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Nuveen Churchill Direct Lending beats CION Investment on 10 of the 17 factors compared between the two stocks.

About Nuveen Churchill Direct Lending

Nuveen Churchill Direct Lending Corp. is a specialty finance company focused primarily on investing in senior secured loans to private equity-owned U.S. middle market companies. It has elected to be regulated as a business development company. Nuveen Churchill Direct Lending Corp. is based in NEW YORK.

About CION Investment

CION Investment Corporation is a business development company. It specializes in investments in senior secured loans, including unitranche loans, First Lien, second lien loans, long-term subordinated loans, and mezzanine loans; equity interests such as warrants or options; and corporate bonds; and other debt securities in middle-market companies. The firm invests in growth capital, acquisitions, leveraged buyouts, market/product expansion, refinancing and recapitalization. The fund also invests up to 30 percent of their assets opportunistically in other types of investments, including the securities of larger public companies and foreign securities. It also makes investments in the secondary loan market. The fund does not invest in start-up companies, turnaround situations, or companies with speculative business plans. The fund prefers to invest in high tech industries, healthcare, pharmaceuticals, business services, media, chemicals, plastic, rubber, telecommunication, consumer services, advertising, printing and publishing, consumer goods, durables, diversified financials, and other industries. It also invests in homebuilding, restaurants, beverage and tobacco bars, broadcasting, distributors, Non-durable good distribution, food beverage and tobacco, energy, oil gas and consumables fuels, insurance, aerospace and defense, industrial machinery, paper and forest product machinery, information technology, metals and mining, and real estate. It primarily seeks to invest in the United States. The fund seeks to invest between $5 million and $50 million in companies with an EBITDA between $25 million and $75 million with average targeted hold of $25 million. It also purchases minority interests in the form of common or preferred equity in the target companies, typically in conjunction with its debt investments or through a co-investment with a financial sponsor. The fund seeks to exit its investments through an initial public offering of common stock, a merger, a sale, or other recapitalization.