Image Source: Pixabay

New Mountain Finance Corp (NMFC) is a closed-end, non-diversified management investment business development company.

It invests in equity interests such as preferred stock, common stock, warrants, or options received in connection with debt investments or may include direct investment in the equity of private companies.

The company's investment objective is to generate current income and capital appreciation through the sourcing and origination of debt securities at all levels of the capital structure, including first and second-lien debt, notes, bonds, and mezzanine securities.

The company has paid quarterly dividends since August 2011 and is headquartered in New York, NY.

Three key data points gauge

New Mountain Finance Corp or any dividend-paying firm.

The key three are:

(1) Price

(2) Dividends

(3) Returns

Those three basic keys best tell whether any company has made, is making, and will make money.

NMFC Price

Over the past year, New Mountain Finance Corp's share price rose about 0.04% from $12.88 to $12.94 as of Tuesday’s market close.

If NMFC trades in the range of $11 to $15 this next year, its recent $12.94 share price might rise to $13.20 by next year. Of course, NMFC’s price could drop about the same $0.26 estimated amount or more.

My annual upside estimate of $0.26 however, is in line with the median of one-year target estimates from seven analysts tracking New Mountain for brokers.

NMFC Dividend

New Mountain Finance Corp has paid variable quarterly dividends since August 2011. NMFC’s recent Q dividend of $0.36 was declared on November 3rd to shareholders of record on December 14th. The payout was made on December 29th.

A forward-looking $1.44 annual dividend yields 11.13% at Tuesday’s $12.94 share price.

NMFC Returns

To put it all together, add NMFC’s estimated annual dividend of $1.44 to the estimated price upside of $0.26 to find a $1.70 gross gain.

At Tuesday’s $12.94 share price, a little under $1000 would buy 77 shares.

A $10 broker fee (if charged), paid half at purchase and half at sale, would cost us about  $0.13 per share.

Subtracting that likely $0.13 brokerage cost from the $1.70 gross gain produces a net gain of $1.57 X 77 shares = $120.89 for a 12.00% estimated net gain.

You might choose to pounce on New Mountain Finance Corp It is a 13-year-old dividend-paying New York based business development company.  Furthermore, the estimated $111.30 of annual dividend income from $1k invested is over 8.5 times greater than NMFC’s recent $12.94 single share price.

The exact track of New Mountain Finance Corp's ongoing future price and dividend will be determined by market action.

Remember the true value of any stock is best realized through personal ownership of shares.

More By This Author:

Current Analysis: Golub Capital BDC Inc.
Current Analysis: Ares Capital (ARCC)
Current Analysis: Exco Technologies