Amalgamated Financial (NASDAQ:AMAL – Get Free Report) and New Mountain Finance (NASDAQ:NMFC – Get Free Report) are both small-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, valuation, dividends, profitability, analyst recommendations, institutional ownership and risk.
Volatility and Risk
Amalgamated Financial has a beta of 0.86, indicating that its share price is 14% less volatile than the S&P 500. Comparatively, New Mountain Finance has a beta of 0.79, indicating that its share price is 21% less volatile than the S&P 500.
Institutional & Insider Ownership
75.9% of Amalgamated Financial shares are held by institutional investors. Comparatively, 32.1% of New Mountain Finance shares are held by institutional investors. 1.3% of Amalgamated Financial shares are held by insiders. Comparatively, 11.7% of New Mountain Finance shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Valuation and Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Amalgamated Financial | $434.51 million | 1.78 | $106.43 million | $3.34 | 7.70 |
| New Mountain Finance | $371.67 million | 2.64 | $113.44 million | $0.76 | 12.16 |
New Mountain Finance has lower revenue, but higher earnings than Amalgamated Financial. Amalgamated Financial is trading at a lower price-to-earnings ratio than New Mountain Finance, indicating that it is currently the more affordable of the two stocks.
Dividends
Amalgamated Financial pays an annual dividend of $0.56 per share and has a dividend yield of 2.2%. New Mountain Finance pays an annual dividend of $1.28 per share and has a dividend yield of 13.9%. Amalgamated Financial pays out 16.8% of its earnings in the form of a dividend. New Mountain Finance pays out 168.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Amalgamated Financial has raised its dividend for 4 consecutive years.
Profitability
This table compares Amalgamated Financial and New Mountain Finance’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Amalgamated Financial | 23.60% | 15.21% | 1.31% |
| New Mountain Finance | 23.27% | 10.43% | 4.32% |
Analyst Ratings
This is a breakdown of current ratings for Amalgamated Financial and New Mountain Finance, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Amalgamated Financial | 1 | 1 | 1 | 0 | 2.00 |
| New Mountain Finance | 2 | 5 | 0 | 0 | 1.71 |
Amalgamated Financial presently has a consensus price target of $33.00, suggesting a potential upside of 28.30%. New Mountain Finance has a consensus price target of $10.50, suggesting a potential upside of 13.64%. Given Amalgamated Financial’s stronger consensus rating and higher probable upside, equities analysts clearly believe Amalgamated Financial is more favorable than New Mountain Finance.
Summary
Amalgamated Financial beats New Mountain Finance on 11 of the 17 factors compared between the two stocks.
About Amalgamated Financial
Amalgamated Financial Corp. operates as the bank holding company for Amalgamated Bank that provides commercial and retail banking, investment management, and trust and custody services for commercial and retail customers in the United States. The company accepts various deposit products, including non-interest bearing accounts, interest-bearing demand products, savings accounts, money market accounts, NOW accounts, and certificates of deposit. It also provides various commercial loans comprising commercial and industrial, multifamily mortgage, and commercial real estate loans; residential mortgage loans; and retail loans, such as residential real estate, consumer solar, and consumer and other loans. In addition, the company offers online banking, bill payment, online cash management, and safe deposit box rental services; debit and ATM cards; and trust, custody, and investment management services comprising asset safekeeping, corporate actions, income collections, proxy, account transition, asset transfers, and conversion management services. Further, it provides investment products, such as funds spanning equity, fixed-income, real estate, and alternative investment products; and brokerage, asset management, and insurance products. Amalgamated Financial Corp. was founded in 1923 and is headquartered in New York, New York.
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.
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