New Mountain Finance Corporation (NASDAQ:NMFC) Given Average Recommendation of "Reduce" by Brokerages

Key Points

• Analyst sentiment is cautious: New Mountain Finance has an average “Reduce” rating from five analysts, including one sell and four hold ratings. The average 12-month price target is $8.25, above its recent $7.13 share price.
• Recent financial results were mixed: The company met quarterly EPS expectations at $0.26, but revenue of $39.02 million fell well short of the $62.78 million analyst estimate. Analysts expect full-year EPS of approximately $1.10.
• The dividend offers a high yield but raises sustainability concerns: NMFC declared a quarterly dividend of $0.25 per share, or $1.00 annually, representing an approximately 14% yield; its payout ratio is negative at -212.77%.

New Mountain Finance Corporation (NASDAQ:NMFC - Get Free Report) has been assigned an average recommendation of "Reduce" from the five analysts that are currently covering the stock, Marketbeat reports. One equities research analyst has rated the stock with a sell rating and four have given a hold rating to the company. The average 1 year target price among brokerages that have issued ratings on the stock in the last year is $8.25.

Several research firms have recently weighed in on NMFC. Weiss Ratings reaffirmed a "sell (d+)" rating on shares of New Mountain Finance in a report on Thursday, August 13th. Keefe, Bruyette & Woods lowered their price target on shares of New Mountain Finance from $9.00 to $8.00 and set a "market perform" rating on the stock in a report on Monday, July 20th. Finally, Wells Fargo & Company dropped their price target on shares of New Mountain Finance from $8.00 to $7.50 and set an "equal weight" rating on the stock in a research report on Wednesday, August 5th.

Hedge Funds Weigh In On New Mountain Finance

A number of hedge funds have recently made changes to their positions in NMFC. LSV Asset Management boosted its holdings in New Mountain Finance by 13.4% in the fourth quarter. LSV Asset Management now owns 2,986,718 shares of the company's stock valued at $27,508,000 after purchasing an additional 353,062 shares in the last quarter. Closed End Fund Advisors Inc. purchased a new position in New Mountain Finance in the fourth quarter valued at approximately $5,398,000. Rivernorth Capital Management LLC acquired a new stake in New Mountain Finance during the second quarter worth approximately $1,008,000. Legal & General Group Plc raised its holdings in New Mountain Finance by 13.5% during the fourth quarter. Legal & General Group Plc now owns 742,423 shares of the company's stock worth $6,827,000 after purchasing an additional 88,441 shares in the last quarter. Finally, Van ECK Associates Corp lifted its position in shares of New Mountain Finance by 19.4% during the 2nd quarter. Van ECK Associates Corp now owns 2,145,047 shares of the company's stock worth $15,380,000 after buying an additional 348,872 shares during the last quarter. Institutional investors and hedge funds own 32.08% of the company's stock.

New Mountain Finance Stock Performance

Shares of New Mountain Finance stock opened at $7.13 on Friday. The company has a 50 day moving average price of $7.32 and a 200 day moving average price of $7.66. The firm has a market capitalization of $673.44 million, a P/E ratio of -15.17 and a beta of 0.57. The company has a quick ratio of 3.66, a current ratio of 3.66 and a debt-to-equity ratio of 1.30. New Mountain Finance has a 52 week low of $6.73 and a 52 week high of $9.98.

New Mountain Finance (NASDAQ:NMFC - Get Free Report) last announced its quarterly earnings data on Monday, August 3rd. The company reported $0.26 earnings per share for the quarter, meeting analysts' consensus estimates of $0.26. The business had revenue of $39.02 million for the quarter, compared to analyst estimates of $62.78 million. New Mountain Finance had a positive return on equity of 10.94% and a negative net margin of 16.78%.During the same period in the prior year, the company earned $0.32 earnings per share. Sell-side analysts expect that New Mountain Finance will post 1.1 EPS for the current year.

New Mountain Finance Dividend Announcement

The business also recently disclosed a quarterly dividend, which will be paid on Wednesday, September 30th. Shareholders of record on Wednesday, September 16th will be given a dividend of $0.25 per share. The ex-dividend date is Wednesday, September 16th. This represents a $1.00 dividend on an annualized basis and a yield of 14.0%. New Mountain Finance's dividend payout ratio is currently -212.77%.

New Mountain Finance Company Profile

New Mountain Finance Corporation NASDAQ: NMFC is a business development company that provides financing to middle-market businesses. The company invests primarily in debt securities, including senior secured loans, unitranche loans and subordinated debt, and may also make equity investments. Its investments are generally structured to support acquisitions, recapitalizations, refinancings, growth initiatives and other corporate activities.

New Mountain Finance focuses on companies operating in defensive growth industries, such as business services, healthcare, software and technology, and other sectors it believes have resilient demand and favorable long-term trends.

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