CM Finance (NASDAQ: CMFN) and iShares S&P NA Tec. Semi. Idx. Fd.(ETF) (NASDAQ:SOXX) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their profitabiliy, earnings, risk, valuation, institutional ownership, dividends and analyst recommendations.

Profitability

This table compares CM Finance and iShares S&P NA Tec. Semi. Idx. Fd.(ETF)’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CM Finance 72.19% 10.11% 5.41%
iShares S&P NA Tec. Semi. Idx. Fd.(ETF) 537.77% 16.94% 16.29%

Earnings and Valuation

This table compares CM Finance and iShares S&P NA Tec. Semi. Idx. Fd.(ETF)’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
CM Finance N/A N/A N/A $1.66 6.08
iShares S&P NA Tec. Semi. Idx. Fd.(ETF) N/A N/A N/A N/A N/A

Analyst Ratings

This is a breakdown of recent recommendations and price targets for CM Finance and iShares S&P NA Tec. Semi. Idx. Fd.(ETF), as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CM Finance 0 1 0 0 2.00
iShares S&P NA Tec. Semi. Idx. Fd.(ETF) 0 5 1 0 2.17

iShares S&P NA Tec. Semi. Idx. Fd.(ETF) has a consensus target price of $170.00, indicating a potential upside of 14.60%. Given iShares S&P NA Tec. Semi. Idx. Fd.(ETF)’s stronger consensus rating and higher possible upside, analysts plainly believe iShares S&P NA Tec. Semi. Idx. Fd.(ETF) is more favorable than CM Finance.

Insider & Institutional Ownership

42.5% of CM Finance shares are owned by institutional investors. 1.8% of CM Finance shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Dividends

CM Finance pays an annual dividend of $1.00 per share and has a dividend yield of 9.9%. iShares S&P NA Tec. Semi. Idx. Fd.(ETF) does not pay a dividend. CM Finance pays out 60.2% of its earnings in the form of a dividend.

Summary

iShares S&P NA Tec. Semi. Idx. Fd.(ETF) beats CM Finance on 7 of the 10 factors compared between the two stocks.

About CM Finance

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.

About iShares S&P NA Tec. Semi. Idx. Fd.(ETF)

iShares PHLX Semiconductor ETF, formerly iShares PHLX SOX Semiconductor Sector Index Fund (the Fund), is an exchange-traded fund. The Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the United States-listed semiconductor stocks as represented by the PHLX Semiconductor Sector Index (the Index). The Index is an equity benchmark for the United States-listed semiconductor stocks. The Index includes companies primarily involved in the design, distribution, manufacture and sale of semiconductors. The Fund generally invests at least 90% of its assets in securities of the Index and in depositary receipts representing securities of the Index. BlackRock Fund Advisors (BFA) serves as the investment adviser to the Fund.

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