Mentor Capital (OTCMKTS:MNTR) and New Mountain Finance (NYSE:NMFC) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, risk, profitability, dividends, valuation and earnings.
Valuation and Earnings
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This table compares Mentor Capital and New Mountain Finance’s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Mentor Capital | $5.28 million | 1.79 | -$410,000.00 | N/A | N/A |
| New Mountain Finance | $231.46 million | 4.86 | $72.35 million | $1.38 | 10.14 |
New Mountain Finance has higher revenue and earnings than Mentor Capital.
Profitability
This table compares Mentor Capital and New Mountain Finance’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Mentor Capital | -7.73% | -6.38% | -5.23% |
| New Mountain Finance | 31.26% | 10.33% | 4.58% |
Insider & Institutional Ownership
0.0% of Mentor Capital shares are owned by institutional investors. Comparatively, 33.8% of New Mountain Finance 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 endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Volatility and Risk
Mentor Capital has a beta of 3.05, meaning that its share price is 205% more volatile than the S&P 500. Comparatively, New Mountain Finance has a beta of 0.61, meaning that its share price is 39% less volatile than the S&P 500.
Dividends
New Mountain Finance pays an annual dividend of $1.36 per share and has a dividend yield of 9.7%. Mentor Capital does not pay a dividend. New Mountain Finance pays out 98.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Analyst Recommendations
This is a summary of recent ratings for Mentor Capital and New Mountain Finance, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Mentor Capital | 0 | 0 | 0 | 0 | N/A |
| New Mountain Finance | 0 | 0 | 1 | 0 | 3.00 |
New Mountain Finance has a consensus target price of $14.00, suggesting a potential upside of 0.07%. Given New Mountain Finance’s higher possible upside, analysts plainly believe New Mountain Finance is more favorable than Mentor Capital.
Summary
New Mountain Finance beats Mentor Capital on 11 of the 13 factors compared between the two stocks.
Mentor Capital Company Profile
Mentor Capital, Inc. is a private equity firm specializing in acquisitions and emerging growth investments. The firm provides passive equity funding and liquidity to smaller companies and owners in the medical, marijuana and social use cannabis companies. It invests in shelf IPO's and public and private companies and seeks to provide public market access to owners of small private companies. The firm specializes in pre-IPO investments in Cannabis companies. In case of shelf IPO's, the firm prefers to invest in companies with sales greater than $40 million. It prefers to take significant position in its portfolio companies. The firm invests only in companies that have earnings. Mentor Capital, Inc. was founded in 1985 and is based in Ramona, California.
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.
