Patria Investments (NYSE:PAX – 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 risk, profitability, earnings, analyst recommendations, institutional ownership, dividends and valuation.
Insider & Institutional Ownership
96.3% of Patria Investments shares are owned by institutional investors. Comparatively, 32.1% of New Mountain Finance shares are owned by institutional investors. 58.1% of Patria Investments shares are owned by company insiders. Comparatively, 14.9% of New Mountain Finance shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Volatility and Risk
Patria Investments has a beta of 0.76, indicating that its share price is 24% less volatile than the S&P 500. Comparatively, New Mountain Finance has a beta of 0.57, indicating that its share price is 43% less volatile than the S&P 500.
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Patria Investments | 0 | 2 | 1 | 0 | 2.33 |
| New Mountain Finance | 2 | 4 | 0 | 0 | 1.67 |
Patria Investments presently has a consensus price target of $17.00, indicating a potential upside of 52.26%. New Mountain Finance has a consensus price target of $8.60, indicating a potential upside of 15.67%. Given Patria Investments’ stronger consensus rating and higher probable upside, equities analysts clearly believe Patria Investments is more favorable than New Mountain Finance.
Dividends
Patria Investments pays an annual dividend of $0.65 per share and has a dividend yield of 5.8%. New Mountain Finance pays an annual dividend of $1.00 per share and has a dividend yield of 13.4%. Patria Investments pays out 147.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. New Mountain Finance pays out -212.8% of its earnings in the form of a dividend. New Mountain Finance is clearly the better dividend stock, given its higher yield and lower payout ratio.
Profitability
This table compares Patria Investments and New Mountain Finance’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Patria Investments | 19.91% | 38.68% | 15.84% |
| New Mountain Finance | -16.78% | 10.94% | 4.58% |
Valuation and Earnings
This table compares Patria Investments and New Mountain Finance”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Patria Investments | $399.23 million | 1.86 | $73.40 million | $0.44 | 25.37 |
| New Mountain Finance | $327.08 million | 2.15 | $16.49 million | ($0.47) | -15.82 |
Patria Investments has higher revenue and earnings than New Mountain Finance. New Mountain Finance is trading at a lower price-to-earnings ratio than Patria Investments, indicating that it is currently the more affordable of the two stocks.
Summary
Patria Investments beats New Mountain Finance on 13 of the 16 factors compared between the two stocks.
About Patria Investments
Patria Investments Limited operates as a private market investment firm focused on investing in Latin America. The company offers asset management services to investors focusing on private equity funds, infrastructure development funds, co-investments funds, constructivist equity funds, and real estate and credit funds. Patria Investments Limited was founded in 1994 and is headquartered in Grand Cayman, the Cayman Islands.
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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