Federated Investors (NYSE:FII) and Oaktree Capital Group (NYSE:OAK) are both mid-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their risk, dividends, institutional ownership, earnings, analyst recommendations, profitability and valuation.
Valuation & Earnings
This table compares Federated Investors and Oaktree Capital Group’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Federated Investors||$1.10 billion||2.28||$291.34 million||$2.18||11.44|
|Oaktree Capital Group||$1.47 billion||4.46||$231.49 million||$3.97||10.51|
This table compares Federated Investors and Oaktree Capital Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Oaktree Capital Group||13.05%||9.38%||2.10%|
Federated Investors pays an annual dividend of $1.08 per share and has a dividend yield of 4.3%. Oaktree Capital Group pays an annual dividend of $2.20 per share and has a dividend yield of 5.3%. Federated Investors pays out 49.5% of its earnings in the form of a dividend. Oaktree Capital Group pays out 55.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Oaktree Capital Group has increased its dividend for 2 consecutive years. Oaktree Capital Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Risk and Volatility
Federated Investors has a beta of 1.26, suggesting that its share price is 26% more volatile than the S&P 500. Comparatively, Oaktree Capital Group has a beta of 0.71, suggesting that its share price is 29% less volatile than the S&P 500.
Institutional and Insider Ownership
84.3% of Federated Investors shares are owned by institutional investors. Comparatively, 26.3% of Oaktree Capital Group shares are owned by institutional investors. 5.3% of Federated Investors shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
This is a summary of current ratings for Federated Investors and Oaktree Capital Group, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Oaktree Capital Group||0||5||1||0||2.17|
Federated Investors currently has a consensus price target of $28.75, indicating a potential upside of 15.32%. Oaktree Capital Group has a consensus price target of $45.25, indicating a potential upside of 8.49%. Given Federated Investors’ higher probable upside, research analysts plainly believe Federated Investors is more favorable than Oaktree Capital Group.
Federated Investors beats Oaktree Capital Group on 10 of the 17 factors compared between the two stocks.
Federated Investors Company Profile
Federated Investors, Inc. is a publicly owned asset management holding company. Through its subsidiaries, the firm provides its services to individuals, including high net worth individuals, banking or thrift institutions, investment companies, pension and profit sharing plans, pooled investment vehicles, charitable organizations, state or municipal government entities, and registered investment advisors. Through its subsidiaries, it manages separate client-focused equity, fixed income, balanced and money market mutual funds along with separate client-focused equity, fixed income, money market, and balanced portfolios. Through its subsidiaries, the firm invests in the public equity and fixed income markets across the globe. It invests in growth and value stocks of small-cap, mid-cap, and large-cap companies. The firm makes its fixed income investments in ultra-short, short-term, and intermediate-term mortgage-backed, U.S. Government, U.S. corporate, high yield, and municipal securities. It employs both fundamental and quantitative analysis to make its equity investments. Federated Investors, Inc. was founded in 1955 and is based in Pittsburgh, Pennsylvania with additional offices in New York City and London, United Kingdom.
Oaktree Capital Group Company Profile
Oaktree Capital Group, LLC operates as a global investment management firm that focuses on alternative markets. It manage investments in a number of strategies within six asset classes, including distressed debt; corporate debt, including high yield debt and senior loans; control investing; convertible securities; real estate; and listed equities. The company pursues these strategies through closed-end, open-end, and evergreen funds. Oaktree Capital Group, LLC was incorporated on May 15, 2007 and is headquartered in Los Angeles, California.
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