iShares Nasdaq Biotechnology ETF (NASDAQ: IBB) and CM Finance (NASDAQ:CMFN) are both financials companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, dividends, valuation, earnings, profitability, risk and institutional ownership.

Volatility & Risk

iShares Nasdaq Biotechnology ETF has a beta of 1.39, indicating that its stock price is 39% more volatile than the S&P 500. Comparatively, CM Finance has a beta of 1.37, indicating that its stock price is 37% more volatile than the S&P 500.

Dividends

iShares Nasdaq Biotechnology ETF pays an annual dividend of $0.69 per share and has a dividend yield of 0.2%. CM Finance pays an annual dividend of $1.00 per share and has a dividend yield of 11.9%. CM Finance pays out 61.0% of its earnings in the form of a dividend.

Analyst Ratings

This is a summary of recent recommendations for iShares Nasdaq Biotechnology ETF and CM Finance, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
iShares Nasdaq Biotechnology ETF 0 0 1 0 3.00
CM Finance 0 0 0 0 N/A

Valuation and Earnings

This table compares iShares Nasdaq Biotechnology ETF and CM Finance’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
iShares Nasdaq Biotechnology ETF N/A N/A N/A N/A N/A
CM Finance $31.01 million 3.71 $23.57 million $1.64 5.12

CM Finance has higher revenue and earnings than iShares Nasdaq Biotechnology ETF.

Profitability

This table compares iShares Nasdaq Biotechnology ETF and CM Finance’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
iShares Nasdaq Biotechnology ETF 17,085.68% 45.47% 39.51%
CM Finance 74.32% 8.75% 4.86%

Institutional & Insider Ownership

60.5% of iShares Nasdaq Biotechnology ETF shares are owned by institutional investors. Comparatively, 43.9% of CM Finance shares are owned by institutional investors. 1.8% of CM Finance shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

iShares Nasdaq Biotechnology ETF beats CM Finance on 7 of the 10 factors compared between the two stocks.

iShares Nasdaq Biotechnology ETF Company Profile

iShares Nasdaq Biotechnology ETF (the Fund), formerly iShares Nasdaq Biotechnology Index Fund, is an exchange-traded fund (ETF). The Fund seeks investment results that correspond generally to the price and yield performance of the NASDAQ Biotechnology Index (the Index). The Index contains securities of NASDAQ listed companies that are classified according to the Industry Classification Benchmark as either biotechnology or pharmaceuticals, which also meet other eligibility criteria determined by NASDAQ. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. The Fund’s investment advisor is BlackRock Fund Advisors, which is indirectly owned by BlackRock, Inc.

CM Finance Company Profile

CM Finance Inc is an externally managed, non-diversified closed-end management investment company. The Company is a specialty finance company that invests primarily in the debt of the United States middle-market companies. The Company’s primary investment objective is to maximize total return to stockholders in the form of current income and capital appreciation by investing in debt and related equity of privately held lower middle-market companies. As of June 30, 2016, the Company’s portfolio consisted of debt and equity investments in 22 portfolio companies. It invests in unitranche loans and standalone second and first lien loans, with an emphasis on floating rate debt. It also selectively invests in mezzanine loans/structured equity and in the equity of portfolio companies through warrants and other instruments.CM Investment Partners LLC is an external investment advisor of the Company.

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