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ARCC vs NMFC
Which Stock Would AI Choose? Ares Capital Corporation (ARCC) vs. New Mountain Finance Corporation (NMFC) Stock Comparison
Key Takeaways
- ARCC, the largest business development company (BDC) by market capitalization at approximately $13.4 billion, offers a dividend yield of 10.28% with a more favorable P/E ratio of 10.04.
- NMFC provides a higher dividend yield of 15.82% but trades at a elevated P/E of 50.56 amid lower EPS of $0.16.
- Both stocks have shown monthly gains of around 5% in recent market activity, though year-to-date performance varies with ARCC demonstrating relative stability.
- ARCC benefits from stronger analyst price targets implying over 16% upside, compared to about 5% for NMFC.
- Recent sentiment for ARCC reflects anticipation around upcoming Q1 earnings, while NMFC has maintained steady distributions.
- Tickeron's AI analysis leans toward ARCC for its scale and efficiency in the BDC sector.
Introduction
ARCC and NMFC are both prominent BDCs that provide financing to middle-market companies, making them attractive for income-focused investors seeking high dividend yields amid volatile equity markets. This comparison evaluates their business models, recent performance, and market positioning to help traders assess relative strengths in the current environment. With interest rate dynamics influencing BDC net investment income (NII), investors monitoring sector exposure and momentum may find insights into potential trade-offs between yield, stability, and growth prospects.
ARCC Overview and Recent Performance
Ares Capital Corporation (ARCC) is the largest publicly traded BDC, specializing in direct lending, mezzanine debt, and equity investments primarily in U.S. middle-market firms. With a market cap exceeding $13 billion, it maintains a diversified portfolio across industries. In recent weeks, ARCC shares have exhibited resilience, posting monthly gains around 5% despite broader sector pressures, trading near $18.67 within a 52-week range of $17.40 to $23.42. Sentiment has been mixed ahead of Q1 earnings on April 28, with analysts forecasting a slight EPS dip to $0.48 but affirming a strong buy rating and average target of $21.73. Influences include anticipation of NII stability and portfolio credit quality amid economic uncertainty.
NMFC Overview and Recent Performance
New Mountain Finance Corporation (NMFC) operates as a BDC affiliated with New Mountain Capital, focusing on senior secured loans and equity to companies backed by its private equity platform. Its smaller scale, with a market cap of about $797 million, emphasizes targeted investments. Recent market activity has seen NMFC shares rise roughly 6% over the past month to around $8.09, within a 52-week range of $7.48 to $11.04. The stock's high dividend yield of 15.82% supports income appeal, bolstered by a recent Q1 distribution declaration of $0.32 per share. Performance reflects steady NII from its portfolio, though upcoming Q1 earnings on May 5 introduce near-term focus on credit metrics and deployment activity.
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Head-to-Head Comparison
Both ARCC and NMFC operate in the BDC space, generating revenue through interest on loans and fees, but ARCC's larger scale enables broader diversification and lower volatility (beta 0.63 vs. 0.60). Growth drivers for ARCC include robust deal flow in direct lending, while NMFC leverages platform synergies for higher yields at potentially elevated risk. Recent momentum favors monthly upticks for both, yet ARCC shows superior ROE (9.39% vs. 1.33%) and profit margins (42.56% vs. 5.04%). Risk factors involve interest rate sensitivity and non-accrual loans, with NMFC's higher debt-to-equity (140.66% vs. 111.91%) amplifying leverage exposure. Sector focus overlaps in middle-market credit, but market sentiment tilts toward ARCC's established positioning.
Tickeron AI Verdict
Tickeron's AI currently favors ARCC over NMFC, citing its greater scale for trend consistency, higher analyst-implied upside, and balanced risk-reward profile amid BDC sector dynamics. While NMFC offers superior yield, ARCC's efficiency and catalysts position it probabilistically stronger for relative outperformance in the near term.
Disclaimer
The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full disclaimer. Disclaimers and Limitations
To compare these two companies we present long-term analysis, their fundamental ratings and make comparative short-term technical analysis which are presented below. The conclusion is ARCC is a StrongBuy and NMFC is a StrongBuy.
Long-Term Analysis
It is best to consider a long-term outlook for a ticker by using Fundamental Analysis (FA) ratings. The rating of 1 to 100, where 1 is best and 100 is worst, is divided into thirds. The first third (a green rating of 1-33) indicates that the ticker is undervalued; the second third (a grey number between 34 and 66) means that the ticker is valued fairly; and the last third (red number of 67 to 100) reflects that the ticker is undervalued. We use an FA Score to show how many ratings show the ticker to be undervalued (green) or overvalued (red).
ARCC’s FA Score shows that 3 FA rating(s) are green whileNMFC’s FA Score has 2 green FA rating(s).
- ARCC’s FA Score: 3 green, 2 red.
- NMFC’s FA Score: 2 green, 3 red.
Short-Term Analysis
It is best to consider a short-term outlook for a ticker by using Technical Analysis (TA) indicators. We use Odds of Success as the percentage of outcomes which confirm successful trade signals in the past.
If the Odds of Success (the likelihood of the continuation of a trend) for each indicator are greater than 50%, then the generated signal is confirmed. A green percentage from 90% to 51% indicates that the ticker is in a bullish trend. A red percentage from 90% - 51% indicates that the ticker is in a bearish trend. All grey percentages are below 50% and are considered not to confirm the trend signal.
ARCC’s TA Score shows that 4 TA indicator(s) are bullish while NMFC’s TA Score has 4 bullish TA indicator(s).
- ARCC’s TA Score: 4 bullish, 4 bearish.
- NMFC’s TA Score: 4 bullish, 5 bearish.
Price Growth
ARCC (@Investment Managers) experienced а -4.19% price change this week, while NMFC (@Investment Managers) price change was -6.24% for the same time period.
The average weekly price growth across all stocks in the @Investment Managers industry was -2.28%. For the same industry, the average monthly price growth was -2.46%, and the average quarterly price growth was -8.13%.
Reported Earning Dates
ARCC is expected to report earnings on Jul 28, 2026.
NMFC is expected to report earnings on Aug 05, 2026.
Industries' Descriptions
@Investment Managers (-2.28% weekly)Investment Managers manage financial assets and other investments of clients. Management includes designing a short- or long-term strategy for buying/holding and selling of portfolio holdings. It can also include tax services and other aspects of financial planning as well. While it is perceived that the industry is faced with growing competition from robo-advisors/digital platforms and passive/ index-tracking funds, many investors still find value in actively managed in-person services that investment management companies often emphasize on. At the same time, many wealth managers are also incorporating digital initiatives/low cost options in addition to their in-person customized services. Their main sources of revenues are fees as a percentage of assets under management, in addition to a certain portion of clients’ gains from asset appreciation. BlackRock, Inc., Blackstone Group Inc and Brookfield Asset Management are some of the major investment management companies.
| ARCC | NMFC | ARCC / NMFC | |
| Capitalization | 12.8B | 676M | 1,893% |
| EBITDA | N/A | N/A | - |
| Gain YTD | -7.092 | -17.402 | 41% |
| P/E Ratio | 10.94 | 53.50 | 20% |
| Revenue | 1.36B | -64.32M | -2,116% |
| Total Cash | N/A | N/A | - |
| Total Debt | 15.8B | 1.33B | 1,191% |
ARCC | NMFC | ||
|---|---|---|---|
OUTLOOK RATING 1..100 | 71 | 63 | |
VALUATION overvalued / fair valued / undervalued 1..100 | 3 Undervalued | 9 Undervalued | |
PROFIT vs RISK RATING 1..100 | 33 | 100 | |
SMR RATING 1..100 | 21 | 92 | |
PRICE GROWTH RATING 1..100 | 58 | 72 | |
P/E GROWTH RATING 1..100 | 48 | 2 | |
SEASONALITY SCORE 1..100 | 49 | 35 |
Tickeron ratings are formulated such that a rating of 1 designates the most successful stocks in a given industry, while a rating of 100 points to the least successful stocks for that industry.
ARCC's Valuation (3) in the null industry is in the same range as NMFC (9). This means that ARCC’s stock grew similarly to NMFC’s over the last 12 months.
ARCC's Profit vs Risk Rating (33) in the null industry is significantly better than the same rating for NMFC (100). This means that ARCC’s stock grew significantly faster than NMFC’s over the last 12 months.
ARCC's SMR Rating (21) in the null industry is significantly better than the same rating for NMFC (92). This means that ARCC’s stock grew significantly faster than NMFC’s over the last 12 months.
ARCC's Price Growth Rating (58) in the null industry is in the same range as NMFC (72). This means that ARCC’s stock grew similarly to NMFC’s over the last 12 months.
NMFC's P/E Growth Rating (2) in the null industry is somewhat better than the same rating for ARCC (48). This means that NMFC’s stock grew somewhat faster than ARCC’s over the last 12 months.
| ARCC | NMFC | |
|---|---|---|
| RSI ODDS (%) | N/A | 2 days ago 67% |
| Stochastic ODDS (%) | 2 days ago 49% | 2 days ago 42% |
| Momentum ODDS (%) | 2 days ago 30% | 2 days ago 27% |
| MACD ODDS (%) | 2 days ago 30% | N/A |
| TrendWeek ODDS (%) | 2 days ago 37% | 2 days ago 43% |
| TrendMonth ODDS (%) | 2 days ago 44% | 2 days ago 41% |
| Advances ODDS (%) | 12 days ago 39% | 14 days ago 33% |
| Declines ODDS (%) | 2 days ago 40% | 2 days ago 43% |
| BollingerBands ODDS (%) | 2 days ago 66% | 2 days ago 59% |
| Aroon ODDS (%) | 2 days ago 36% | 2 days ago 43% |
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ARCC and
Correlation & Price change
A.I.dvisor indicates that over the last year, ARCC has been closely correlated with OBDC. These tickers have moved in lockstep 80% of the time. This A.I.-generated data suggests there is a high statistical probability that if ARCC jumps, then OBDC could also see price increases.
| Ticker / NAME | Correlation To ARCC | 1D Price Change % | ||
|---|---|---|---|---|
| ARCC | 100% | -1.05% | ||
| OBDC - ARCC | 80% Closely correlated | -0.74% | ||
| GBDC - ARCC | 78% Closely correlated | -0.49% | ||
| BXSL - ARCC | 75% Closely correlated | -1.65% | ||
| CSWC - ARCC | 73% Closely correlated | +0.96% | ||
| TSLX - ARCC | 71% Closely correlated | -2.17% | ||
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NMFC and
Correlation & Price change
A.I.dvisor indicates that over the last year, NMFC has been closely correlated with ARCC. These tickers have moved in lockstep 69% of the time. This A.I.-generated data suggests there is a high statistical probability that if NMFC jumps, then ARCC could also see price increases.
| Ticker / NAME | Correlation To NMFC | 1D Price Change % | ||
|---|---|---|---|---|
| NMFC | 100% | -1.40% | ||
| ARCC - NMFC | 69% Closely correlated | -1.05% | ||
| OCSL - NMFC | 65% Loosely correlated | -1.47% | ||
| BCSF - NMFC | 65% Loosely correlated | -1.54% | ||
| NCDL - NMFC | 62% Loosely correlated | -1.23% | ||
| OBDC - NMFC | 61% Loosely correlated | -0.74% | ||
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