New Mountain Finance (NASDAQ:NMFC – Get Free Report) and Crescent Capital BDC (NASDAQ:CCAP – Get Free Report) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, dividends, valuation and analyst recommendations.
Profitability
This table compares New Mountain Finance and Crescent Capital BDC’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| New Mountain Finance | 20.84% | 10.42% | 4.34% |
| Crescent Capital BDC | 20.84% | 9.76% | 4.30% |
Volatility & Risk
New Mountain Finance has a beta of 0.58, indicating that its share price is 42% less volatile than the S&P 500. Comparatively, Crescent Capital BDC has a beta of 0.54, indicating that its share price is 46% less volatile than the S&P 500.
Earnings & Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| New Mountain Finance | $371.67 million | 2.56 | $113.44 million | $0.65 | 14.20 |
| Crescent Capital BDC | $197.36 million | 2.72 | $73.65 million | $0.98 | 14.79 |
New Mountain Finance has higher revenue and earnings than Crescent Capital BDC. New Mountain Finance is trading at a lower price-to-earnings ratio than Crescent Capital BDC, indicating that it is currently the more affordable of the two stocks.
Dividends
New Mountain Finance pays an annual dividend of $1.28 per share and has a dividend yield of 13.9%. Crescent Capital BDC pays an annual dividend of $1.68 per share and has a dividend yield of 11.6%. New Mountain Finance pays out 196.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Crescent Capital BDC pays out 171.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Crescent Capital BDC has raised its dividend for 1 consecutive years.
Institutional & Insider Ownership
32.1% of New Mountain Finance shares are owned by institutional investors. Comparatively, 49.5% of Crescent Capital BDC shares are owned by institutional investors. 11.7% of New Mountain Finance shares are owned by company insiders. Comparatively, 1.1% of Crescent Capital BDC shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Analyst Ratings
This is a summary of current ratings and recommmendations for New Mountain Finance and Crescent Capital BDC, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| New Mountain Finance | 1 | 6 | 0 | 0 | 1.86 |
| Crescent Capital BDC | 0 | 2 | 3 | 1 | 2.83 |
New Mountain Finance presently has a consensus price target of $10.17, indicating a potential upside of 10.15%. Crescent Capital BDC has a consensus price target of $16.38, indicating a potential upside of 13.01%. Given Crescent Capital BDC’s stronger consensus rating and higher possible upside, analysts clearly believe Crescent Capital BDC is more favorable than New Mountain Finance.
Summary
Crescent Capital BDC beats New Mountain Finance on 10 of the 17 factors compared between the two stocks.
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 Crescent Capital BDC
Crescent Capital BDC, Inc. is as a business development company private equity / buyouts and loan fund. It specializes in directly investing. It specializes in middle market. The fund seeks to invest in United States.
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