Financial Comparison: Oaktree Specialty Lending (OCSL) and Sallie Mae (SLM)

Oaktree Specialty Lending (NASDAQ: OCSL) and Sallie Mae (NASDAQ:SLM) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their dividends, earnings, analyst recommendations, risk, profitability, valuation and institutional ownership.

Risk & Volatility

Oaktree Specialty Lending has a beta of 0.12, meaning that its share price is 88% less volatile than the S&P 500. Comparatively, Sallie Mae has a beta of 1.27, meaning that its share price is 27% more volatile than the S&P 500.

Dividends

Oaktree Specialty Lending pays an annual dividend of $0.34 per share and has a dividend yield of 6.9%. Sallie Mae does not pay a dividend. Oaktree Specialty Lending pays out 66.7% of its earnings in the form of a dividend.

Valuation and Earnings

This table compares Oaktree Specialty Lending and Sallie Mae’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Oaktree Specialty Lending $177.96 million 3.90 -$196.96 million $0.51 9.65
Sallie Mae $1.43 billion 3.47 $288.93 million $0.71 16.10

Sallie Mae has higher revenue and earnings than Oaktree Specialty Lending. Oaktree Specialty Lending is trading at a lower price-to-earnings ratio than Sallie Mae, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

42.9% of Oaktree Specialty Lending shares are held by institutional investors. Comparatively, 99.7% of Sallie Mae shares are held by institutional investors. 0.1% of Oaktree Specialty Lending shares are held by company insiders. Comparatively, 0.4% of Sallie Mae shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Oaktree Specialty Lending and Sallie Mae’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Oaktree Specialty Lending -95.34% 6.74% 3.65%
Sallie Mae 20.85% 17.18% 1.65%

Analyst Recommendations

This is a summary of recent recommendations and price targets for Oaktree Specialty Lending and Sallie Mae, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Oaktree Specialty Lending 0 4 3 0 2.43
Sallie Mae 0 1 9 0 2.90

Oaktree Specialty Lending presently has a consensus target price of $5.42, suggesting a potential upside of 10.09%. Sallie Mae has a consensus target price of $14.58, suggesting a potential upside of 27.52%. Given Sallie Mae’s stronger consensus rating and higher possible upside, analysts clearly believe Sallie Mae is more favorable than Oaktree Specialty Lending.

Summary

Sallie Mae beats Oaktree Specialty Lending on 13 of the 16 factors compared between the two stocks.

Oaktree Specialty Lending Company Profile

Oaktree Specialty Lending Corporation, formerly Fifth Street Finance Corp., is a specialty finance company. The Company is focused on providing customized one-stop credit solutions to companies with limited access to public or syndicated capital markets. The Company provides companies with flexible financing solutions including first and second lien loans, unsecured and mezzanine loans, and preferred equity. The company acts as a business development company. The Company serves various industries, including Internet software and services, healthcare services, multi-sector holdings, advertising, healthcare equipment, pharmaceuticals, construction and engineering, research and consulting services, and industrial machinery. The Company’s investment advisor is Oaktree Capital Management, L.P.

Sallie Mae Company Profile

SLM Corporation, together with its subsidiaries, operates as a saving, planning, and paying for college company in the United States. The company originates and services private education loans to students and their families. Its loan portfolio also includes federal family education loan program, personal, and other loans. In addition, the company offers savings products, including certificates of deposits, money market deposit accounts, and high yield savings accounts; and a consumer savings network that provides financial rewards on everyday purchases to help families save for college. SLM Corporation was founded in 1972 and is headquartered in Newark, Delaware.

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