Critical Review: Onity Group (NYSE:ONIT) versus Nuveen Churchill Direct Lending (NYSE:NCDL)

Onity Group (NYSE:ONIT) and Nuveen Churchill Direct Lending (NYSE:NCDL) are both small-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, analyst recommendations, earnings, profitability, valuation, risk and institutional ownership.

Profitability

This table compares Onity Group and Nuveen Churchill Direct Lending’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Onity Group	0.16%	15.54%	0.52%
Nuveen Churchill Direct Lending	50.23%	12.70%	5.92%

Valuation and Earnings

This table compares Onity Group and Nuveen Churchill Direct Lending”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Onity Group	$1.10 billion	0.21	-$63.70 million	$0.53	57.06
Nuveen Churchill Direct Lending	$99.54 million	9.63	$75.94 million	N/A	N/A

Nuveen Churchill Direct Lending has lower revenue, but higher earnings than Onity Group.

Institutional and Insider Ownership

70.2% of Onity Group shares are owned by institutional investors. 7.6% of Onity Group shares are owned by insiders. Comparatively, 0.5% of Nuveen Churchill Direct Lending shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings and target prices for Onity Group and Nuveen Churchill Direct Lending, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Onity Group	0	0	1	1	3.50
Nuveen Churchill Direct Lending	0	3	3	0	2.50

Onity Group presently has a consensus price target of $35.00, suggesting a potential upside of 15.74%. Nuveen Churchill Direct Lending has a consensus price target of $18.33, suggesting a potential upside of 5.24%. Given Onity Group’s stronger consensus rating and higher possible upside, equities analysts plainly believe Onity Group is more favorable than Nuveen Churchill Direct Lending.

Summary

Onity Group beats Nuveen Churchill Direct Lending on 7 of the 12 factors compared between the two stocks.

About Onity Group

Onity Group Inc., a financial services company, originates and services mortgage loans in the United States, the United States Virgin Islands, India, and the Philippines. It operates through, Servicing and Originations segments. The company provides commercial forward mortgage loan servicing, reverse mortgage servicing, special servicing, and asset management services for to owners of mortgage loans and foreclosed real estate, as well as residential mortgage loan servicing, such as forward and reverse conventional, government-insured, and non-agency loans, including the reverse mortgage loans classified as loans. It also originates and purchases conventional and government-insured residential forward and reverse mortgage loans through its correspondent lending arrangements, broker relationships, and retail channels. It serves primarily under the PHH Mortgage and Liberty Reverse Mortgage brands. The company was formerly known as Ocwen Financial Corporation and changed its name to Onity Group Inc. in June 2024. Onity Group Inc. was founded in 1988 and is headquartered in West Palm Beach, Florida.

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.