Cannae (NYSE: CNNE) and CM Finance (NASDAQ:CMFN) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, dividends, profitability, risk and valuation.
Risk & Volatility
Cannae has a beta of 0.76, meaning that its stock price is 24% less volatile than the S&P 500. Comparatively, CM Finance has a beta of 1.27, meaning that its stock price is 27% more volatile than the S&P 500.
Valuation & Earnings
This table compares Cannae and CM Finance’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Cannae||$1.34 billion||0.94||$650.00 million||$1.62||10.96|
|CM Finance||$31.01 million||3.60||$23.57 million||$1.37||5.95|
Cannae has higher revenue and earnings than CM Finance. CM Finance is trading at a lower price-to-earnings ratio than Cannae, indicating that it is currently the more affordable of the two stocks.
This table compares Cannae and CM Finance’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
CM Finance pays an annual dividend of $1.00 per share and has a dividend yield of 12.3%. Cannae does not pay a dividend. CM Finance pays out 73.0% of its earnings in the form of a dividend.
Insider & Institutional Ownership
76.7% of Cannae shares are held by institutional investors. Comparatively, 45.4% of CM Finance shares are held by institutional investors. 6.0% of Cannae shares are held by insiders. Comparatively, 1.8% of CM Finance shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
This is a breakdown of current ratings and target prices for Cannae and CM Finance, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Cannae beats CM Finance on 7 of the 13 factors compared between the two stocks.
Cannae Company Profile
Cannae Holdings, Inc. is a diversified holding company. The Company has investments in a variety of industries including Restaurants, Technology Enabled Healthcare Services, Financial Services and more. The Company holds majority and minority equity investment stakes in a number of entities, including Ceridian Holdings, LLC, American Blue Ribbon Holdings, and LLC and T-System Holding LLC.
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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