Financial Comparison: ONEX (OTCMKTS:ONEXF) and Carlyle Secured Lending (NASDAQ:CGBD)

Carlyle Secured Lending (NASDAQ:CGBD) and ONEX (OTCMKTS:ONEXF) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, earnings, analyst recommendations, valuation, institutional ownership, dividends and risk.

Volatility and Risk

Carlyle Secured Lending has a beta of 0.66, indicating that its stock price is 34% less volatile than the S&P 500. Comparatively, ONEX has a beta of 1.25, indicating that its stock price is 25% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and target prices for Carlyle Secured Lending and ONEX, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Carlyle Secured Lending	0	5	1	0	2.17
ONEX	0	2	3	0	2.60

Carlyle Secured Lending currently has a consensus price target of $11.33, indicating a potential upside of 8.77%. Given Carlyle Secured Lending’s higher possible upside, equities analysts clearly believe Carlyle Secured Lending is more favorable than ONEX.

Dividends

Carlyle Secured Lending pays an annual dividend of $1.40 per share and has a dividend yield of 13.4%. ONEX pays an annual dividend of $0.28 per share and has a dividend yield of 0.4%. Carlyle Secured Lending pays out 274.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. ONEX pays out 4.2% of its earnings in the form of a dividend.

Profitability

This table compares Carlyle Secured Lending and ONEX’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Carlyle Secured Lending	14.26%	8.85%	3.90%
ONEX	63.83%	5.24%	4.21%

Earnings and Valuation

This table compares Carlyle Secured Lending and ONEX”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Carlyle Secured Lending	$255.57 million	2.81	$69.97 million	$0.51	20.43
ONEX	$899.00 million	6.12	$617.00 million	$6.68	10.79

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

Insider & Institutional Ownership

24.5% of Carlyle Secured Lending shares are held by institutional investors. Comparatively, 0.7% of ONEX shares are held by institutional investors. 0.3% of Carlyle Secured Lending shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

ONEX beats Carlyle Secured Lending on 10 of the 16 factors compared between the two stocks.

About Carlyle Secured Lending

Carlyle Secured Lending, Inc. is business development company specializing in first lien debt, senior secured loans, second lien senior secured loan unsecured debt, mezzanine debt and investments in equities. It specializes in directly investing. It specializes in middle market. It targets healthcare and pharmaceutical, aerospace and defense, high tech industries, business services, software, beverage food and tobacco, hotel gamming and leisure, banking finance insurance and in real estate sector. The fund seeks to invest across United States of America, Luxembourg, Cayman Islands, Cyprus, and United Kingdom. It invests in companies with EBITDA between $25 million and $100 million.

About ONEX

Onex Corporation is a private equity firm specializing in acquisitions and platform acquisitions. The firm makes investments in buyouts, large- middle market, large-cap, mid-cap, and small-cap market and distressed companies. It also invests in recapitalization, growth capital, corporate carve-outs of subsidiaries and mission-critical supply divisions from multinational corporations, operational restructurings of undervalued businesses, and builds up. The firm seeks to invest in technology, electronics manufacturing services, industrial, aerospace, healthcare, retail, restaurants, industrials products, customer care services, metal services, building products, entertainment, gaming, cabinetry products, commercial vehicles, commercial and investment banking, financial services, commercial and multi-unit residential real estate. It invests in global businesses headquartered in North America, including United States and Canada, or Europe. The firm seeks to invest between $125 million and $1 billion in companies that have minimum revenues of $300 million. It does not consider size if the company is in an industry in which the firm already has presence. The firm seeks to make direct as well as co-investments through managed private equity, real estate and credit funds. It seeks to acquire a control position in its portfolio companies. Onex Corporation was founded in 1984 and is based in Toronto, Canada with additional offices in New York, New York; Englewood Cliffs, New Jersey; Boston, Massachusetts and London, United Kingdom.