New Mountain FinanceNASDAQ: NMFC

New Mountain Finance reported quarterly earnings of $0.36 per share, falling short of the Zacks Consensus Estimate of $0.39 per share. This is lower than the earnings of $0.38 per share reported in the same quarter last year.

New Mountain Finance has paid 4 straight supplemental dividends in addition to its $.32 base dividend. Dividend coverage reached a record 1.23X in 2023. We compare New Mountain Finance to the BDC industry for valuations, performance, profitability and debt.

New Mountain Finance (NMFC) came out with quarterly earnings of $0.40 per share, beating the Zacks Consensus Estimate of $0.39 per share. This compares to earnings of $0.35 per share a year ago.

We take a look at the action in preferreds and baby bonds through the second week of December and highlight some of the key themes we are watching. Preferreds finished lower as Treasury yields slightly backed up, but most sectors remained positive for the month. Investors should consider lower-coupon preferreds to mitigate redemption risk and leave room for a rally if rates continue to decrease.

New Mountain Finance (NASDAQ:NMFC ) Q3 2023 Earnings Conference Call November 3, 2023 11:00 AM ET Company Participants John Kline – President and Chief Executive Officer Steve Klinsky – Chairman Laura Holson – Chief Operating Officer and Interim Chief Financial Officer Conference Call Participants Finian O'Shea – Wells Fargo Bryce Rowe – B. Riley Paul Johnson – KBW Operator Good morning, everyone, and welcome to the New Mountain Finance Corporation's Third Quarter 2023 Earnings Conference Call.

New Mountain Finance has a stable NAV/share and a healthy portfolio, outperforming the S&P 500 in total returns over the past 5 years. NMFC benefits from higher interest rates and has a healthy balance sheet, making it an attractive investment for high income seekers. It pays a well-covered regular dividend with capacity for special dividends, and trades at a discount to NAV.

This article discusses dividend coverage for two BDCs currently yielding around 11% including supplemental dividends. We suggest one of these companies with a list of positives that investors should consider. One of the largest mistakes that BDC investors make is focusing on historical dividend coverage instead of projected dividend coverage which is heavily reliant on portfolio credit quality.

New Mountain Finance is a business development company that primarily targets loans to middle-market companies. NMFC is currently trading at a 7% discount to NAVPS and has been covering its dividends with net investment income, yielding just under 10%. Analysis of NMFC's industry holdings suggests the company is on track to post a solid Q2 2023 earnings report in a few weeks.

New Mountain Finance is benefiting from the higher interest rate environment, leading to increased quarterly dividend payments and the launch of a supplemental dividend program. NMFC's Q1 23 results were impressive, with revenues up 25% and net income jumping nearly 200% from the previous quarter. Despite potential risks such as a deeper-than-expected US recession, the company's focus on non-cyclical sectors and protective collateral and covenant structuring in their investments provide attractive risk-reward dynamics.