Financial Comparison: Nuveen Churchill Direct Lending (NYSE:NCDL) and PennyMac Financial Services (NYSE:PFSI)

Nuveen Churchill Direct Lending (NYSE:NCDL) and PennyMac Financial Services (NYSE:PFSI) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, valuation, institutional ownership, earnings, dividends, profitability and analyst recommendations.

Earnings and Valuation

This table compares Nuveen Churchill Direct Lending and PennyMac Financial Services’ top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nuveen Churchill Direct Lending	$161.76 million	6.01	$75.94 million	N/A	N/A
PennyMac Financial Services	$1.40 billion	3.25	$144.66 million	$2.71	33.38

PennyMac Financial Services has higher revenue and earnings than Nuveen Churchill Direct Lending.

Profitability

This table compares Nuveen Churchill Direct Lending and PennyMac Financial Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nuveen Churchill Direct Lending	46.95%	11.91%	4.89%
PennyMac Financial Services	10.32%	7.69%	1.42%

Analyst Recommendations

This is a breakdown of recent ratings for Nuveen Churchill Direct Lending and PennyMac Financial Services, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nuveen Churchill Direct Lending	0	3	3	0	2.50
PennyMac Financial Services	0	1	6	0	2.86

Nuveen Churchill Direct Lending presently has a consensus target price of $18.50, indicating a potential upside of 4.40%. PennyMac Financial Services has a consensus target price of $98.13, indicating a potential upside of 8.47%. Given PennyMac Financial Services’ stronger consensus rating and higher possible upside, analysts plainly believe PennyMac Financial Services is more favorable than Nuveen Churchill Direct Lending.

Dividends

Nuveen Churchill Direct Lending pays an annual dividend of $1.80 per share and has a dividend yield of 10.2%. PennyMac Financial Services pays an annual dividend of $0.80 per share and has a dividend yield of 0.9%. PennyMac Financial Services pays out 29.5% of its earnings in the form of a dividend.

Insider and Institutional Ownership

57.9% of PennyMac Financial Services shares are held by institutional investors. 17.4% of PennyMac Financial Services shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

PennyMac Financial Services beats Nuveen Churchill Direct Lending on 7 of the 13 factors compared between the two stocks.

About Nuveen Churchill Direct Lending

Nuveen Churchill Direct Lending Corp. is a specialty finance company focused primarily on investing in senior secured loans to private equity-owned U.S. middle market companies. It has elected to be regulated as a business development company. Nuveen Churchill Direct Lending Corp. is based in NEW YORK.

About PennyMac Financial Services

PennyMac Financial Services, Inc., through its subsidiaries, engages in the mortgage banking and investment management activities in the United States. The company operates through three segments: Production, Servicing, and Investment Management. The Production segment is involved in the origination, acquisition, and sale of loans. This segment sources residential conventional and government-insured or guaranteed mortgage loans through correspondent production, consumer direct lending, and broker direct lending. The Servicing segment performs loan servicing for both newly originated loans that are under holding for sale and loans services for others. The segment performs loan administration, collection, and default management activities, including the collection and remittance of loan payments; responds to customer inquiries; provides accounting for principal and interest; holds custodial funds for the payment of property taxes and insurance premiums; counsels delinquent borrowers; and supervising foreclosures and property dispositions, as well as administers loss mitigation activities, such as modification and forbearance programs. The Investment Management segment is involved in sourcing, performing diligence, bidding, and closing investment asset acquisitions; managing correspondent production activities for PennyMac Mortgage Investment Trust; and managing acquired assets. The company was founded in 2008 and is headquartered in Westlake Village, California.