Contrasting Oaktree Specialty Lending (OCSL) & IEG (IEGH)

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

Profitability

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

Net Margins Return on Equity Return on Assets
Oaktree Specialty Lending 33.71% 7.18% 3.92%
IEG N/A N/A N/A

Dividends

Oaktree Specialty Lending pays an annual dividend of $0.38 per share and has a dividend yield of 8.0%. IEG pays an annual dividend of $0.01 per share. Oaktree Specialty Lending pays out 88.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Institutional and Insider Ownership

43.9% of Oaktree Specialty Lending shares are held by institutional investors. Comparatively, 0.1% of IEG shares are held by institutional investors. 0.1% of Oaktree Specialty Lending shares are held by company insiders. Comparatively, 39.5% of IEG shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Oaktree Specialty Lending and IEG’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Oaktree Specialty Lending $138.72 million 4.81 $46.76 million $0.43 11.00
IEG N/A N/A N/A N/A N/A

Oaktree Specialty Lending has higher revenue and earnings than IEG.

Analyst Ratings

This is a summary of recent recommendations for Oaktree Specialty Lending and IEG, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Oaktree Specialty Lending 0 3 3 0 2.50
IEG 0 0 1 0 3.00

Oaktree Specialty Lending currently has a consensus price target of $5.40, indicating a potential upside of 14.16%. IEG has a consensus price target of $0.80, indicating a potential upside of ∞. Given IEG’s stronger consensus rating and higher possible upside, analysts clearly believe IEG is more favorable than Oaktree Specialty Lending.

Summary

Oaktree Specialty Lending beats IEG on 7 of the 11 factors compared between the two stocks.

Oaktree Specialty Lending Company Profile

Oaktree Specialty Lending Corporation is a business development company specializing in investments in middle market, bridge financing, first and second lien debt financing, mezzanine debt, senior and junior secured debt, expansions, sponsor-led acquisitions, and management buyouts in small and mid-sized companies. The fund seeks to invest in education services, business services, retail and consumer, healthcare, manufacturing, food and restaurants, construction and engineering, and media and advertising 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 with 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.

IEG Company Profile

IEG Holdings Corporation, a consumer finance company, provides online unsecured consumer loans to individuals. It offers loans for debt consolidation, medical expenses, home improvements, auto repairs, purchases, and discretionary spending. The company provides its unsecured consumer loans to residents under the Mr. Amazing Loans brand name through its mramazingloans.com Website in 19 states, including Alabama, Arizona, California, Florida, Georgia, Illinois, Kentucky, Louisiana, Maryland, Missouri, Nevada, New Jersey, New Mexico, Ohio, Oregon, Pennsylvania, Texas, Utah, and Virginia. IEG Holdings Corporation was founded in 1999 and is headquartered in Las Vegas, Nevada.

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