Financial Survey: Oaktree Specialty Lending (NASDAQ:OCSL) & Bank of New York Mellon (NYSE:BNY)

Oaktree Specialty Lending (NASDAQ:OCSL) and Bank of New York Mellon (NYSE:BNY) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their risk, valuation, analyst recommendations, institutional ownership, profitability, dividends and earnings.

Risk & Volatility

Oaktree Specialty Lending has a beta of 0.5, indicating that its stock price is 50% less volatile than the S&P 500. Comparatively, Bank of New York Mellon has a beta of 1.05, indicating that its stock price is 5% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Oaktree Specialty Lending and Bank of New York Mellon, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Oaktree Specialty Lending	0	6	0	0	2.00
Bank of New York Mellon	0	6	10	1	2.71

Oaktree Specialty Lending presently has a consensus price target of $11.83, suggesting a potential downside of 5.56%. Bank of New York Mellon has a consensus price target of $157.13, suggesting a potential upside of 1.12%. Given Bank of New York Mellon’s stronger consensus rating and higher possible upside, analysts plainly believe Bank of New York Mellon is more favorable than Oaktree Specialty Lending.

Dividends

Oaktree Specialty Lending pays an annual dividend of $1.20 per share and has a dividend yield of 9.6%. Bank of New York Mellon pays an annual dividend of $2.52 per share and has a dividend yield of 1.6%. Oaktree Specialty Lending pays out 250.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Bank of New York Mellon pays out 29.3% of its earnings in the form of a dividend. Bank of New York Mellon has increased its dividend for 14 consecutive years.

Valuation & Earnings

This table compares Oaktree Specialty Lending and Bank of New York Mellon”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Oaktree Specialty Lending	$316.80 million	3.48	$33.92 million	$0.48	26.10
Bank of New York Mellon	$40.76 billion	2.59	$5.55 billion	$8.59	18.09

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

Insider & Institutional Ownership

36.8% of Oaktree Specialty Lending shares are held by institutional investors. Comparatively, 85.3% of Bank of New York Mellon shares are held by institutional investors. 0.3% of Oaktree Specialty Lending shares are held by insiders. Comparatively, 0.2% of Bank of New York Mellon shares are held 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.

Profitability

This table compares Oaktree Specialty Lending and Bank of New York Mellon’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Oaktree Specialty Lending	14.45%	9.70%	4.64%
Bank of New York Mellon	15.52%	16.00%	1.27%

Summary

Bank of New York Mellon beats Oaktree Specialty Lending on 13 of the 18 factors compared between the two stocks.

About Oaktree Specialty Lending

Oaktree Specialty Lending Corporation is a business development company. The fund specializing in investments in middle market, bridge financing, first and second lien debt financing, unsecured and mezzanine loan, mezzanine debt, senior and junior secured debt, expansions, sponsor-led acquisitions, preferred equity, and management buyouts in small and mid-sized companies. It seeks to invest in education services, business services, retail and consumer, healthcare, manufacturing, food and restaurants, construction and engineering. The firm also seeks investment in media, advertising sectors, software, IT services, pharmaceuticals, biotechnology, real estate management and development, chemicals, machinery, and internet and direct marketing retail sectors. It invests between $5 million to $75 million principally in the form of one-stop, first lien, and second lien debt investments, which may include an equity co-investment component in companies. The firm invest in companies having enterprise value between $20 million and $150 million and EBITDA between $3 million and $50 million. The fund has a hold size of up to $75 million and may underwrite transactions up to $100 million. It primarily invests in North America. The fund seeks to be a lead investor in its portfolio companies.

About Bank of New York Mellon

The Bank of New York Mellon Corporation provides a range of financial products and services in the United States and internationally. The company operates through Securities Services, Market and Wealth Services, Investment and Wealth Management, and other segments. The Securities Services segment offers custody, trust and depositary, accounting, exchange-traded funds, middle-office solutions, transfer agency, services for private equity and real estate funds, foreign exchange, securities lending, liquidity/lending services, and data analytics. This segment also provides trustee, paying agency, fiduciary, escrow and other financial, issuer, and support services for brokers and investors. The Market and Wealth Services segment offers clearing and custody, investment, wealth and retirement solutions, technology and enterprise data management, trading, and prime brokerage services. This segment also provides integrated cash management solutions, including payments, foreign exchange, liquidity management, receivables processing and payables management, and trade finance and processing services. The Investment and Wealth Management segment offers investment management strategies and distribution of investment products, investment management, custody, wealth and estate planning, private banking, investment, and information management services. The Other segment engages in the provision of leasing, corporate treasury, derivative and other trading, corporate and bank-owned life insurance, renewable energy investment, and business exit services. It serves central banks and sovereigns, financial institutions, asset managers, insurance companies, corporations, local authorities and high net-worth individuals, and family offices. The Bank of New York Mellon Corporation was founded in 1784 and is headquartered in New York, New York.