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NMFC vs PSEC
Which Stock Would AI Choose? New Mountain Finance Corporation (NMFC) vs. Prospect Capital Corporation (PSEC) Stock Comparison
Key Takeaways
- NMFC is an investment-grade business development company (BDC) focused on "defensive growth" middle-market lending, while PSEC is a lower-leveraged BDC targeting lower-middle-market, first-lien senior secured loans.
- PSEC offers a substantially higher headline dividend yield, but its share price and net asset value (NAV) per share have declined meaningfully over the past year.
- NMFC has prioritized share buybacks, portfolio diversification, and liability management, with its quarterly dividend recently reset to a level fully covered by net investment income.
- Both stocks trade at discounts to their respective NAVs, a common trait across the BDC sector, reflecting investor caution around credit quality and interest-rate conditions.
- For more detail on these companies, explore NMFC Major News and NMFC Today's Price Move, as well as PSEC Major News and PSEC Today's Price Move.
- To see how automated strategies are positioning across thousands of tickers, explore Trending AI Robots.
Introduction
Both NMFC and PSEC are business development companies (BDCs) — regulated investment vehicles that lend to, and invest in, private middle-market businesses while distributing most of their taxable income to shareholders. This makes them natural candidates for income-focused investors comparing dividend yield, credit quality, and market positioning. Yet the two firms differ sharply in leverage, portfolio strategy, and recent price behavior, so a side-by-side stock comparison offers a useful lens for evaluating relative performance and risk in the current environment.
NMFC Overview and Recent Performance
New Mountain Finance Corporation, advised by New Mountain Capital, lends primarily to middle-market companies in what it calls "defensive growth" sectors, including software, healthcare, and business services. In recent quarters, management has concentrated on portfolio diversification, monetizing equity positions, and strengthening its liability structure. The company maintains investment-grade credit ratings and reported a net debt-to-equity ratio below the midpoint of its target range in its latest quarter.
Recent market activity has been shaped by a reset in its distribution policy: the quarterly dividend was reduced to a level covered by adjusted net investment income (NII), a measure of recurring earnings after expenses), while non-accrual loans improved to a small fraction of portfolio fair value. Share repurchases at a discount to book value have continued. The stock trades near the lower end of its 52-week range, reflecting the sector-wide pressure on BDC valuations despite relatively stable underlying credit metrics.
PSEC Overview and Recent Performance
Prospect Capital Corporation operates as a BDC focused on first-lien senior secured lending to lower-middle-market companies, increasingly targeting businesses with earnings before interest, taxes, depreciation, and amortization (EBITDA) below $50 million. Management has been rotating the portfolio toward first-lien loans and away from second-lien debt, subordinated structured notes, and real estate holdings, while maintaining one of the lowest leverage ratios in the industry.
Over the past year, PSEC has experienced notable share-price weakness, with the stock declining sharply from its 52-week high even as it pays a high forward dividend yield on a monthly cadence. NAV per share has also trended lower. The company continues to highlight a long track record of cumulative distributions to shareholders, but the combination of a declining book value and a deep discount to NAV has weighed on investor sentiment in recent months.
Trending AI Robots
Tickeron's Trending AI Robots page curates a selection of the platform's best-performing automated trading strategies. Tickeron hosts hundreds of AI trading bots covering thousands of different tickers, each with its own trading style, strategy, timeframe, performance statistics, and basket of securities. Because only the strategies most suited to current market conditions earn a place in this section, the page serves as a practical starting point for traders evaluating systematic approaches. Whether a strategy favors income-oriented BDCs like NMFC and PSEC or momentum-driven equities depends on real-time signals. Explore Trending AI Robots to review the available bots and their live performance metrics.
Head-to-Head Comparison
The most visible contrast is income versus capital stability. PSEC pays distributions monthly and carries a far higher forward yield, while NMFC pays quarterly and deliberately reduced its payout to align with earnings power. On credit quality, NMFC holds investment-grade ratings and a predominantly "green"-rated portfolio, whereas PSEC leans on low leverage and senior secured positioning rather than external ratings.
Growth drivers also diverge. NMFC is working through equity monetizations and buybacks intended to accrete book value, while PSEC is mid-way through a multi-year portfolio rotation toward first-lien assets. Risk factors include interest-rate sensitivity, non-accruals, and the persistent discount to NAV for both names. Market sentiment has favored NMFC's more defensive, investment-grade profile, even though PSEC has delivered stronger trailing total returns over recent periods.
Tickeron AI Verdict
Based on observable factors such as trend consistency, credit stability, dividend coverage, and balance-sheet positioning, Tickeron's AI would likely lean toward NMFC in the current environment. The investment-grade rating, improving non-accrual trend, and a dividend that is fully covered by net investment income point to greater earnings stability. PSEC's higher yield and low leverage are notable strengths, but its declining NAV and steep share-price discount introduce greater uncertainty. This is a probabilistic assessment of relative positioning, not a definitive prediction of future returns.
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.
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 NMFC is a StrongBuy and PSEC is a Hold.
NMFC's RSI Oscillator recovers from oversold territory
The RSI Oscillator for NMFC moved out of oversold territory on October 15, 2026. This could be a sign that the stock is shifting from a downward trend to an upward trend. Traders may want to buy the stock or call options. The A.I.dvisor looked at 26 similar instances when the indicator left oversold territory. In 14 of the 26 cases the stock moved higher. This puts the odds of a move higher at 54%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on October 27, 2026. You may want to consider a long position or call options on NMFC as a result. In 33 of 92 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 36%.
The Moving Average Convergence Divergence (MACD) for NMFC just turned positive on October 27, 2026. Looking at past instances where NMFC's MACD turned positive, the stock continued to rise in 14 of 46 cases over the following month. The odds of a continued upward trend are 30%.
NMFC moved above its 50-day moving average on October 29, 2026 date and that indicates a change from a downward trend to an upward trend.
Following a +2.62% 3-day Advance, the price is estimated to grow further. Considering data from situations where NMFC advanced for three days, in 102 of 295 cases, the price rose further within the following month. The odds of a continued upward trend are 35%.
Bearish Trend Analysis
The Stochastic Oscillator demonstrated that the ticker has stayed in the overbought zone for 5 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where NMFC declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 46%.
NMFC broke above its upper Bollinger Band on October 29, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Aroon Indicator for NMFC entered a downward trend on October 30, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Fundamental Analysis (Ratings)
The Tickeron Valuation Rating of 3 (best 1 - 100 worst) indicates that the company is seriously undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (0.643) is normal, around the industry mean (2.440). P/E Ratio (-14.583) is within average values for comparable stocks, (-3.350). Projected Growth (PEG Ratio) (0.000) is also within normal values, averaging (1.319). Dividend Yield (0.143) settles around the average of (0.267) among similar stocks. NMFC's P/S Ratio (69.930) is slightly higher than the industry average of (15.694).
The Tickeron Seasonality Score of 50 (best 1 - 100 worst) indicates that the company is fair valued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron Price Growth Rating for this company is 58 (best 1 - 100 worst), indicating fairly steady price growth. NMFC’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron SMR rating for this company is 78 (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron PE Growth Rating for this company is 99 (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. NMFC’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 80, placing this stock worse than average.
PSEC's RSI Oscillator slumps oversold zone
The RSI Indicator for PSEC moved into overbought territory on November 05, 2026. Be on the watch for a price drop or consolidation in the future -- when this happens, think about selling the stock or exploring put options.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Stochastic Oscillator is in the oversold zone. Keep an eye out for a move up in the foreseeable future.
The Moving Average Convergence Divergence (MACD) for PSEC just turned positive on October 28, 2026. Looking at past instances where PSEC's MACD turned positive, the stock continued to rise in 26 of 46 cases over the following month. The odds of a continued upward trend are 57%.
Following a +6.93% 3-day Advance, the price is estimated to grow further. Considering data from situations where PSEC advanced for three days, in 121 of 267 cases, the price rose further within the following month. The odds of a continued upward trend are 45%.
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on November 05, 2026. You may want to consider selling the stock, shorting the stock, or exploring put options on PSEC as a result. In 72 of 100 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are 72%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where PSEC declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 59%.
The Aroon Indicator for PSEC entered a downward trend on November 02, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Fundamental Analysis (Ratings)
The Tickeron SMR rating for this company is 19 (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Price Growth Rating for this company is 81 (best 1 - 100 worst), indicating slightly worse than average price growth. PSEC’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron PE Growth Rating for this company is 84 (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Valuation Rating of 92 (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (0.252) is normal, around the industry mean (2.444). P/E Ratio (23.083) is within average values for comparable stocks, (-2.250). Projected Growth (PEG Ratio) (1.548) is also within normal values, averaging (1.319). Dividend Yield (0.101) settles around the average of (0.272) among similar stocks. P/S Ratio (5.432) is also within normal values, averaging (15.694).
The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. PSEC’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 80, placing this stock worse than average.
NMFC | PSEC | ||
|---|---|---|---|
OUTLOOK RATING 1..100 | 11 | 5 | |
VALUATION overvalued / fair valued / undervalued 1..100 | 3 Undervalued | 92 Overvalued | |
PROFIT vs RISK RATING 1..100 | 100 | 100 | |
SMR RATING 1..100 | 78 | 19 | |
PRICE GROWTH RATING 1..100 | 58 | 81 | |
P/E GROWTH RATING 1..100 | 99 | 84 | |
SEASONALITY SCORE 1..100 | 50 | 50 |
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.
NMFC's Valuation (3) in the null industry is significantly better than the same rating for PSEC (92). This means that NMFC’s stock grew significantly faster than PSEC’s over the last 12 months.
NMFC's Profit vs Risk Rating (100) in the null industry is in the same range as PSEC (100). This means that NMFC’s stock grew similarly to PSEC’s over the last 12 months.
PSEC's SMR Rating (19) in the null industry is somewhat better than the same rating for NMFC (78). This means that PSEC’s stock grew somewhat faster than NMFC’s over the last 12 months.
NMFC's Price Growth Rating (58) in the null industry is in the same range as PSEC (81). This means that NMFC’s stock grew similarly to PSEC’s over the last 12 months.
PSEC's P/E Growth Rating (84) in the null industry is in the same range as NMFC (99). This means that PSEC’s stock grew similarly to NMFC’s over the last 12 months.
| NMFC | PSEC | |
|---|---|---|
| RSI ODDS (%) | 2 days ago 54% | 1 day ago 75% |
| Stochastic ODDS (%) | 2 days ago 39% | 1 day ago 50% |
| Momentum ODDS (%) | 2 days ago 36% | 1 day ago 72% |
| MACD ODDS (%) | 2 days ago 30% | 1 day ago 57% |
| TrendWeek ODDS (%) | 2 days ago 32% | 1 day ago 59% |
| TrendMonth ODDS (%) | 2 days ago 26% | 1 day ago 52% |
| Advances ODDS (%) | 8 days ago 35% | 8 days ago 45% |
| Declines ODDS (%) | 11 days ago 46% | 1 day ago 59% |
| BollingerBands ODDS (%) | 2 days ago 33% | N/A |
| Aroon ODDS (%) | 2 days ago 49% | 1 day ago 38% |
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 overvalued. We use an FA Score to show how many ratings show the ticker to be undervalued (green) or overvalued (red).
NMFC’s FA Score shows that 1 FA rating(s) are green while PSEC’s FA Score has 1 green FA rating(s).
- NMFC’s FA Score: 1 green, 4 red.
- PSEC’s FA Score: 1 green, 4 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.
NMFC’s TA Score shows that 5 TA indicator(s) are bullish while PSEC’s TA Score has 4 bullish TA indicator(s).
- NMFC’s TA Score: 5 bullish, 4 bearish.
- PSEC’s TA Score: 4 bullish, 3 bearish.
Price Growth
NMFC (@Investment Managers) experienced а +2.75% price change this week, while PSEC (@Investment Managers) price change was -14.51% for the same time period.
The average weekly price growth across all stocks in the @Investment Managers industry was -3.24%. For the same industry, the average monthly price growth was -6.45%, and the average quarterly price growth was -6.12%.
Reported Earning Dates
NMFC is expected to report earnings on Mar 01, 2027.
PSEC is expected to report earnings on Feb 10, 2027.
Industries' Descriptions
@Investment Managers (-3.24% 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.
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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% | +1.28% | ||
| ARCC - NMFC | 69% Closely correlated | +2.37% | ||
| GBDC - NMFC | 68% Closely correlated | +2.67% | ||
| OCSL - NMFC | 67% Closely correlated | +3.36% | ||
| BCSF - NMFC | 67% Closely correlated | +3.31% | ||
| FSK - NMFC | 66% Closely correlated | +2.96% | ||
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