Critical Comparison: Oaktree Specialty Lending (OCSL) and IEG (IEGH)

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

Analyst Recommendations

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

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 presently has a consensus target price of $5.40, indicating a potential upside of 15.14%. IEG has a consensus target price of $0.80, indicating a potential upside of 196.30%. Given IEG’s stronger consensus rating and higher possible upside, analysts clearly believe IEG is more favorable than Oaktree Specialty Lending.

Dividends

Oaktree Specialty Lending pays an annual dividend of $0.38 per share and has a dividend yield of 8.1%. IEG pays an annual dividend of $0.01 per share and has a dividend yield of 3.7%. Oaktree Specialty Lending pays out 74.5% of its earnings in the form of a dividend.

Insider & Institutional Ownership

42.4% 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 insiders. Comparatively, 39.5% of IEG shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

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 -82.24% 6.50% 3.52%
IEG N/A N/A N/A

Earnings & Valuation

This table compares Oaktree Specialty Lending and IEG’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 $177.96 million 3.71 -$196.96 million $0.51 9.20
IEG N/A N/A N/A N/A N/A

IEG has lower revenue, but higher earnings than Oaktree Specialty Lending.

Summary

Oaktree Specialty Lending beats IEG on 6 of the 11 factors compared between the two stocks.

About Oaktree Specialty Lending

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.

About IEG

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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