New Mountain Finance (NYSE:NMFC) and Firsthand Technology Value Fund (NASDAQ:SVVC) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, earnings, profitability, dividends, risk and institutional ownership.
This table compares New Mountain Finance and Firsthand Technology Value Fund’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|New Mountain Finance||45.47%||10.18%||4.82%|
|Firsthand Technology Value Fund||2,592.77%||-9.75%||-9.08%|
New Mountain Finance has a beta of 0.53, suggesting that its stock price is 47% less volatile than the S&P 500. Comparatively, Firsthand Technology Value Fund has a beta of 1.19, suggesting that its stock price is 19% more volatile than the S&P 500.
This is a breakdown of recent ratings and target prices for New Mountain Finance and Firsthand Technology Value Fund, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|New Mountain Finance||0||1||1||0||2.50|
|Firsthand Technology Value Fund||0||0||0||0||N/A|
New Mountain Finance currently has a consensus price target of $14.50, suggesting a potential upside of 8.45%. Given New Mountain Finance’s higher probable upside, research analysts plainly believe New Mountain Finance is more favorable than Firsthand Technology Value Fund.
New Mountain Finance pays an annual dividend of $1.36 per share and has a dividend yield of 10.2%. Firsthand Technology Value Fund does not pay a dividend. New Mountain Finance pays out 105.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Earnings & Valuation
This table compares New Mountain Finance and Firsthand Technology Value Fund’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|New Mountain Finance||$197.81 million||5.14||$109.39 million||$1.29||10.36|
|Firsthand Technology Value Fund||$1.57 million||60.60||$26.17 million||N/A||N/A|
New Mountain Finance has higher revenue and earnings than Firsthand Technology Value Fund.
Institutional and Insider Ownership
36.2% of New Mountain Finance shares are owned by institutional investors. Comparatively, 4.4% of Firsthand Technology Value Fund shares are owned by institutional investors. 10.3% of New Mountain Finance shares are owned by insiders. Comparatively, 3.6% of Firsthand Technology Value Fund shares are owned 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.
New Mountain Finance beats Firsthand Technology Value Fund on 9 of the 13 factors compared between the two stocks.
About New Mountain Finance
New Mountain Finance Corporation is a Business Development Company specializing in investments in middle market companies and debt securities at various levels of the capital structure, including first and second lien debt, unsecured notes, bonds, and mezzanine securities. It invests in various industries that include software, education, business services, distribution and logistics, federal services, healthcare services and products, healthcare facilities, energy, media, consumer and industrial services, healthcare Information Technology, Information Technology and services, specialty chemicals and materials, telecommunication, retail, and power generation. It seeks to invest in United States. It typically invests between $10 million and $50 million. Within middle market it seeks to invest in companies having EBITDA between $20 million and $200 million. It prefers to invest in equity interests, such as preferred stock, common stock, warrants, or options received in connection with its debt investments and directly in the equity of private companies. The fund makes investments through both primary originations and open-market secondary purchases. It invests primarily in debt securities that are rated below investment grade and have contractual unlevered returns of 10% to 15%. The firm may also invest in distressed debt and related opportunities and prefers to invest in targets having private equity sponsorship. It seeks to hold its investments between five years and ten years. The fund prefer to have majority stake in companies.
About Firsthand Technology Value Fund
Firsthand Technology Value Fund, Inc. is a publicly traded ventures capital fund invests in companies located in the US. The fund target companies operating in the fields of game changing technology and cleantech services. It provides financing in the form of equity and debt for early, growth and later stage capital requirements with an investment size ranges between $1 and $10 million.
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