Head to Head Review: New Mountain Finance (NASDAQ:NMFC) vs. Nuveen Churchill Direct Lending (NYSE:NCDL)

New Mountain Finance (NASDAQ:NMFC) and Nuveen Churchill Direct Lending (NYSE:NCDL) are both small-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, analyst recommendations, valuation and dividends.

Insider & Institutional Ownership

32.1% of New Mountain Finance shares are owned by institutional investors. 14.9% of New Mountain Finance shares are owned by insiders. Comparatively, 0.7% of Nuveen Churchill Direct Lending shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares New Mountain Finance and Nuveen Churchill Direct Lending’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
New Mountain Finance	5.04%	10.66%	4.41%
Nuveen Churchill Direct Lending	31.57%	10.48%	4.47%

Dividends

New Mountain Finance pays an annual dividend of $1.28 per share and has a dividend yield of 15.7%. Nuveen Churchill Direct Lending pays an annual dividend of $1.44 per share and has a dividend yield of 10.1%. New Mountain Finance pays out 853.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Nuveen Churchill Direct Lending pays out 109.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Risk and Volatility

New Mountain Finance has a beta of 0.54, meaning that its share price is 46% less volatile than the S&P 500. Comparatively, Nuveen Churchill Direct Lending has a beta of 0.32, meaning that its share price is 68% less volatile than the S&P 500.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
New Mountain Finance	$327.08 million	2.46	$16.49 million	$0.15	54.40
Nuveen Churchill Direct Lending	$207.86 million	3.37	$65.61 million	$1.31	10.83

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

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for New Mountain Finance and Nuveen Churchill Direct Lending, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
New Mountain Finance	2	5	0	0	1.71
Nuveen Churchill Direct Lending	0	4	2	0	2.33

New Mountain Finance currently has a consensus price target of $9.25, suggesting a potential upside of 13.36%. Nuveen Churchill Direct Lending has a consensus price target of $15.50, suggesting a potential upside of 9.25%. Given New Mountain Finance’s higher possible upside, equities analysts clearly believe New Mountain Finance is more favorable than Nuveen Churchill Direct Lending.

About New Mountain Finance

New Mountain Finance Corporation (Nasdaq: NMFC), a business development company is a private equity / buyouts and loan fund specializes in directly investing and lending to middle market companies in defensive growth industries. The fund prefers investing in buyout and middle market companies. It also makes investments in debt securities at all levels of the capital structure including first and second lien debt, unsecured notes, and mezzanine securities. In some cases, its investments may also include equity interests. It targets energy, engineering and consulting services, specialty chemicals and materials, trading companies and distributors, commercial printing, diversified support services, education services, environmental and facilities services, office services and supplies, media, distributors, health care services, health care facilities, application software, business services, systems software, federal services, distribution and logistics, interactive home entertainment, telecommunication services, hydroelectric power generation, electric power generation by fossil fuels, electric power generation by nuclear fuels, health care technology, and security and alarm services. The fund seeks to invest in United States of America. It seeks to invest between $10 million and $125 million per transaction. The firm invests through both primary originations and open-market secondary purchases. It invests in companies with EBITDA between $10 million and $200 million. The fund seeks a majority stake in its portfolio companies.

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.