NYSE:NMFC

Stock Analysis Report

Executive Summary

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.

Rewards


Snowflake Analysis


Similar Companies

Share Price & News

How has New Mountain Finance's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: NMFC has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0.7%

NMFC

1.7%

US Capital Markets

1.5%

US Market


1 Year Return

3.6%

NMFC

19.0%

US Capital Markets

20.1%

US Market

Return vs Industry: NMFC underperformed the US Capital Markets industry which returned 19% over the past year.

Return vs Market: NMFC underperformed the US Market which returned 20.1% over the past year.


Shareholder returns

NMFCIndustryMarket
7 Day0.7%1.7%1.5%
30 Day0.8%0.5%1.4%
90 Day6.3%8.6%8.7%
1 Year14.4%3.6%21.4%19.0%22.7%20.1%
3 Year29.9%-3.4%40.0%32.1%50.1%40.5%
5 Year57.5%-4.1%83.6%66.5%73.1%54.1%

Price Volatility Vs. Market

How volatile is New Mountain Finance's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is New Mountain Finance undervalued compared to its fair value and its price relative to the market?

16.4%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: NMFC ($14.34) is trading below our estimate of fair value ($17.15)

Significantly Below Fair Value: NMFC is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: NMFC is good value based on its PE Ratio (12.9x) compared to the Capital Markets industry average (36x).

PE vs Market: NMFC is good value based on its PE Ratio (12.9x) compared to the US market (18.4x).


Price to Earnings Growth Ratio

PEG Ratio: NMFC is poor value based on its PEG Ratio (1.2x)


Price to Book Ratio

PB vs Industry: NMFC is good value based on its PB Ratio (1.1x) compared to the US Capital Markets industry average (6.7x).

Future Growth

How is New Mountain Finance forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

10.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: NMFC's forecast earnings growth (10.7% per year) is above the savings rate (1.7%).

Earnings vs Market: NMFC's earnings (10.7% per year) are forecast to grow slower than the US market (14.5% per year).

High Growth Earnings: NMFC's earnings are forecast to grow, but not significantly.

Revenue vs Market: NMFC's revenue (8.3% per year) is forecast to grow faster than the US market (7.6% per year).

High Growth Revenue: NMFC's revenue (8.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if NMFC's Return on Equity is forecast to be high in 3 years time

Past Performance

How has New Mountain Finance performed over the past 5 years?

16.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: NMFC has a high level of non-cash earnings.

Growing Profit Margin: NMFC's current net profit margins (33.6%) are lower than last year (45.5%).


Past Earnings Growth Analysis

Earnings Trend: NMFC's earnings have grown by 16.8% per year over the past 5 years.

Accelerating Growth: NMFC's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: NMFC had negative earnings growth (-10.8%) over the past year, making it difficult to compare to the Capital Markets industry average (8.4%).


Return on Equity

High ROE: NMFC's Return on Equity (7.7%) is considered low.


Return on Assets


Return on Capital Employed

Financial Health

How is New Mountain Finance's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: NMFC has a low level of unsold assets or inventory.

Debt Coverage by Assets: NMFC's debt is not covered by short term assets (assets are 0.1x debt).


Financial Institutions Analysis

Asset Level: NMFC's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if NMFC has a sufficient allowance for bad loans.

Low Risk Liabilities: NMFC reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if NMFC has an acceptable proportion of non-loan assets held.

Low Risk Deposits: NMFC has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if NMFC has an appropriate level of bad loans.

Dividend

What is New Mountain Finance's current dividend yield, its reliability and sustainability?

9.48%

Current Dividend Yield


Dividend Yield vs Market

company9.5%marketbottom25%1.4%markettop25%3.7%industryaverage1.9%forecastin3Years9.5%

Current dividend yield vs market & industry

Notable Dividend: NMFC's dividend (9.48%) is higher than the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: NMFC's dividend (9.48%) is in the top 25% of dividend payers in the US market (3.69%)


Stability and Growth of Payments

Stable Dividend: NMFC has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: NMFC's dividend payments have increased, but the company has only paid a dividend for 9 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (122.1%), NMFC's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: NMFC's dividends in 3 years are not forecast to be well covered by earnings (97.4% payout ratio).

Management

How experienced are the management team and are they aligned to shareholders interests?

4.2yrs

Average management tenure


CEO

Rob Hamwee (49yo)

9.6yrs

Tenure

0

Mr. Robert A. Hamwee, also known as Rob, serves as Director of Edmentum, Inc. He serves as a Managing Director of New Mountain Capital, LLC since 2008. He had been Chief Executive Officer and President of  ...


Leadership Team

NamePositionTenureCompensationOwnership
Robert Hamwee
CEO & Member of Board of Director9.6yrsno data0.41% $5.7m
Adam Weinstein
Chief Administrative Officer7.6yrsno data0.15% $2.1m
John Kline
President0.3yrsno data0.14% $2.0m
Shiraz Kajee
Chief Financial Officer4.2yrsno data0.0077% $107.5k
Karrie Jerry
Chief Compliance Officer & Corporate Secretary4.7yrsno data0.0055% $76.2k
James Stone
Managing Director0yrsno data0.13% $1.8m
Andre Moura
Managing Director1.4yrsno datano data
Jessica Hanna
Controller2.1yrsno datano data
Laura Holson
Director & Head of Capital Markets0yrsno datano data
Joy Xu
Vice President0yrsno datano data

4.2yrs

Average Tenure

42yo

Average Age

Experienced Management: NMFC's management team is considered experienced (4.2 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Robert Hamwee
CEO & Member of Board of Director9.6yrsno data0.41% $5.7m
Adam Weinstein
Chief Administrative Officer7.6yrsno data0.15% $2.1m
John Kline
President0.3yrsno data0.14% $2.0m
Steven Klinsky
Chairman of the Board9.6yrsno data8.21% $113.9m
Alfred Hurley
Director9.3yrsUS$121.18k0.040% $557.4k
Rome Arnold
Director2.9yrsUS$119.07k0.018% $251.6k
David Ogens
Director9.3yrsUS$131.68k0.068% $942.4k
Daniel Hébert
Director0.4yrsno datano data
Alice Handy
Director0.3yrsno datano data

7.6yrs

Average Tenure

63yo

Average Age

Experienced Board: NMFC's board of directors are considered experienced (7.6 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: NMFC insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 6%.


Top Shareholders

Company Information

New Mountain Finance Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: New Mountain Finance Corporation
  • Ticker: NMFC
  • Exchange: NYSE
  • Founded: 2010
  • Industry: Asset Management and Custody Banks
  • Sector: Diversified Financials
  • Market Cap: US$1.388b
  • Shares outstanding: 96.77m
  • Website: https://www.newmountainfinance.com

Location

  • New Mountain Finance Corporation
  • 787 Seventh Avenue
  • 49th Floor
  • New York
  • New York
  • 10019
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
NMFCNYSE (New York Stock Exchange)YesCommon SharesUSUSDMay 2011
1N4DB (Deutsche Boerse AG)YesCommon SharesDEEURMay 2011
NMFXNYSE (New York Stock Exchange)5.75% NT SR 23USUSDSep 2018

Biography

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. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/17 00:29
End of Day Share Price2020/02/14 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.