Contrasting Oaktree Specialty Lending (NASDAQ:OCSL) & Stifel Financial (NYSE:SF)

Oaktree Specialty Lending (NASDAQ:OCSL) and Stifel Financial (NYSE:SF) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, risk, profitability and dividends.

Profitability

This table compares Oaktree Specialty Lending and Stifel Financial’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%
Stifel Financial	16.50%	19.33%	2.36%

Insider and Institutional Ownership

36.8% of Oaktree Specialty Lending shares are held by institutional investors. Comparatively, 82.0% of Stifel Financial shares are held by institutional investors. 0.3% of Oaktree Specialty Lending shares are held by insiders. Comparatively, 3.4% of Stifel Financial shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Oaktree Specialty Lending and Stifel Financial”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Oaktree Specialty Lending	$53.53 million	20.46	$33.92 million	$0.48	25.90
Stifel Financial	$5.53 billion	2.00	$683.78 million	$5.76	12.69

Stifel Financial has higher revenue and earnings than Oaktree Specialty Lending. Stifel Financial 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.

Risk & Volatility

Oaktree Specialty Lending has a beta of 0.5, meaning that its stock price is 50% less volatile than the S&P 500. Comparatively, Stifel Financial has a beta of 1.01, meaning that its stock price is 1% more volatile than the S&P 500.

Dividends

Oaktree Specialty Lending pays an annual dividend of $1.20 per share and has a dividend yield of 9.7%. Stifel Financial pays an annual dividend of $1.36 per share and has a dividend yield of 1.9%. 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. Stifel Financial pays out 23.6% of its earnings in the form of a dividend. Stifel Financial has raised its dividend for 9 consecutive years.

Analyst Recommendations

This is a summary of current recommendations and price targets for Oaktree Specialty Lending and Stifel Financial, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Oaktree Specialty Lending	1	7	0	0	1.88
Stifel Financial	1	3	5	0	2.44

Oaktree Specialty Lending presently has a consensus target price of $11.83, suggesting a potential downside of 4.80%. Stifel Financial has a consensus target price of $85.71, suggesting a potential upside of 17.22%. Given Stifel Financial’s stronger consensus rating and higher possible upside, analysts clearly believe Stifel Financial is more favorable than Oaktree Specialty Lending.

Summary

Stifel Financial beats Oaktree Specialty Lending on 13 of the 17 factors compared between the two stocks.

About Oaktree Specialty Lending

Oaktree Specialty Lending Corporation is a business development company that provides financing to middle-market companies. It is externally managed by Oaktree Fund Advisors, an affiliate of Oaktree Capital Management. The company invests primarily in privately negotiated debt, including first- and second-lien loans, subordinated debt and mezzanine financing. It may also make preferred equity and other equity investments, often alongside its debt investments. Oaktree Specialty Lending focuses mainly on companies in the United States, seeking to provide flexible financing for business growth, acquisitions, recapitalizations and other corporate needs.

About Stifel Financial

Stifel Financial Corp. is a financial services holding company headquartered in St. Louis, Missouri. Founded in 1890 as a brokerage firm, it has grown into a provider of services for individual investors, businesses, and institutional clients. Through its wealth management business, Stifel offers investment advice, financial planning, brokerage services, and related banking and lending services. Its institutional businesses provide equity and fixed-income research, sales and trading, and investment banking services, including advice on mergers and acquisitions and assistance with securities offerings.