New Mountain Finance (NYSE:NMFC) and Dragon Victory International (NASDAQ:LYL) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their valuation, institutional ownership, analyst recommendations, risk, profitability, dividends and earnings.

Valuation and Earnings

This table compares New Mountain Finance and Dragon Victory International’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
New Mountain Finance $197.81 million 5.14 $109.39 million $1.29 10.36
Dragon Victory International $4.28 million 4.83 $190,000.00 N/A N/A

New Mountain Finance has higher revenue and earnings than Dragon Victory International.

Dividends

New Mountain Finance pays an annual dividend of $1.36 per share and has a dividend yield of 10.2%. Dragon Victory International does not pay a dividend. New Mountain Finance pays out 105.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares New Mountain Finance and Dragon Victory International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
New Mountain Finance 45.47% 10.18% 4.82%
Dragon Victory International N/A N/A N/A

Institutional & Insider Ownership

36.7% of New Mountain Finance shares are owned by institutional investors. Comparatively, 0.1% of Dragon Victory International shares are owned by institutional investors. 10.3% of New Mountain Finance shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and recommmendations for New Mountain Finance and Dragon Victory International, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
New Mountain Finance 0 1 1 0 2.50
Dragon Victory International 0 0 0 0 N/A

New Mountain Finance presently has a consensus price target of $14.50, indicating a potential upside of 8.53%. Given New Mountain Finance’s higher probable upside, research analysts plainly believe New Mountain Finance is more favorable than Dragon Victory International.

Summary

New Mountain Finance beats Dragon Victory International on 11 of the 12 factors compared between the two stocks.

New Mountain Finance Company Profile

New Mountain Finance Corporation is a Business Development Company specializing in investments in middle market companies and debt securities at various levels of the capital structure, including first and second lien debt, unsecured notes, bonds, and mezzanine securities. It invests in various industries that include software, education, business services, distribution and logistics, federal services, healthcare services and products, healthcare facilities, energy, media, consumer and industrial services, healthcare Information Technology, Information Technology and services, specialty chemicals and materials, telecommunication, retail, and power generation. It seeks to invest in United States. It typically invests between $10 million and $50 million. Within middle market it seeks to invest in companies having EBITDA between $20 million and $200 million. It prefers to invest in equity interests, such as preferred stock, common stock, warrants, or options received in connection with its debt investments and directly in the equity of private companies. The fund makes investments through both primary originations and open-market secondary purchases. It invests primarily in debt securities that are rated below investment grade and have contractual unlevered returns of 10% to 15%. The firm may also invest in distressed debt and related opportunities and prefers to invest in targets having private equity sponsorship. It seeks to hold its investments between five years and ten years. The fund prefer to have majority stake in companies.

Dragon Victory International Company Profile

Dragon Victory International Limited provides reward-based crowdfunding in China. The company operates through four segments: Crowdfunding Platform Service, Incubation Services, Finder's Fees Services, and Auto-Parts Procurement Services. It operates 5etou, an online crowdfunding platform at 5etou.cn that enables project searching for funding to connect with funding sources. The company also operates auto-parts service operation that serves auto-repair shops seeking and transacting with auto-parts suppliers. In addition, it offers finder's service to assist companies to obtain loans or additional equity financing, introduce them to potential business partners, find merger candidates or other strategic relationships, or assist with feasibility studies. Further, the company provides business incubation services related to marketing, sales, strategic planning, and guidance and general resources in ancillary services, such as coordinating human resources, legal, accounting, operations, assisting with feasibility studies, and other types of services. Dragon Victory International Limited was founded in 2015 and is headquartered in Hangzhou, the People's Republic of China.

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