Eagle Point Credit (NYSE: ECC) and Oaktree Strategic Income (NASDAQ:OCSI) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their earnings, institutional ownership, risk, dividends, valuation, profitability and analyst recommendations.
Eagle Point Credit pays an annual dividend of $2.40 per share and has a dividend yield of 13.2%. Oaktree Strategic Income pays an annual dividend of $0.56 per share and has a dividend yield of 7.0%. Eagle Point Credit pays out 127.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Oaktree Strategic Income pays out 73.7% of its earnings in the form of a dividend.
Earnings & Valuation
This table compares Eagle Point Credit and Oaktree Strategic Income’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Eagle Point Credit||$65.29 million||5.24||$31.13 million||$1.88||9.68|
|Oaktree Strategic Income||$46.57 million||5.08||-$8.76 million||$0.76||10.57|
Eagle Point Credit has higher revenue and earnings than Oaktree Strategic Income. Eagle Point Credit is trading at a lower price-to-earnings ratio than Oaktree Strategic Income, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of recent ratings and target prices for Eagle Point Credit and Oaktree Strategic Income, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Eagle Point Credit||0||0||4||0||3.00|
|Oaktree Strategic Income||0||2||0||0||2.00|
Eagle Point Credit presently has a consensus target price of $21.13, indicating a potential upside of 16.07%. Oaktree Strategic Income has a consensus target price of $9.25, indicating a potential upside of 15.19%. Given Eagle Point Credit’s stronger consensus rating and higher probable upside, equities analysts plainly believe Eagle Point Credit is more favorable than Oaktree Strategic Income.
This table compares Eagle Point Credit and Oaktree Strategic Income’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Eagle Point Credit||47.68%||10.46%||7.06%|
|Oaktree Strategic Income||-16.64%||6.93%||3.47%|
Insider and Institutional Ownership
57.1% of Eagle Point Credit shares are held by institutional investors. Comparatively, 26.9% of Oaktree Strategic Income shares are held by institutional investors. 0.6% of Eagle Point Credit shares are held by insiders. Comparatively, 0.4% of Oaktree Strategic Income 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.
Volatility & Risk
Eagle Point Credit has a beta of 0.19, meaning that its stock price is 81% less volatile than the S&P 500. Comparatively, Oaktree Strategic Income has a beta of 0.26, meaning that its stock price is 74% less volatile than the S&P 500.
Eagle Point Credit beats Oaktree Strategic Income on 13 of the 16 factors compared between the two stocks.
About Eagle Point Credit
Eagle Point Credit Company Inc. is a non-diversified, closed-end management investment company. The Company’s primary investment objective is to generate high current income, with a secondary objective to generate capital appreciation. The Company primarily invests in equity and junior debt tranches of collateralized loan obligations (CLOs) that are collateralized by a portfolio consisting primarily of the below investment grade United States senior secured loans. It may also invest in other securities and instruments related to these investments. The Company’s portfolio includes its investments in various industries, such as business equipment and services; healthcare; electronics/electrical; leisure goods/activities/movies; retailers (except food and drug); chemicals and plastics; telecommunications; financial intermediaries, and utilities. The Company’s advisor is Eagle Point Credit Management LLC.
About Oaktree Strategic Income
Oaktree Strategic Income Corporation, formerly Fifth Street Senior Floating Rate Corp., is a closed-end, non-diversified management investment company. The Company operates as a specialty finance company. The Company’s investment objective is to maximize its portfolio’s total return by generating current income from its debt investments while seeking to preserve its capital. The Company invests in senior secured loans, including first lien, unitranche and second lien debt instruments. The Company may also invest in unsecured loans, including subordinated loans, issued by private middle market companies, and senior and subordinated loans issued by public companies and equity investments. The senior loans that the Company targets have final maturities of 4 to 7 years. The Company seeks to invest in senior loans made primarily to private middle market companies. The Company’s investment advisor is Oaktree Capital Management, L.P.
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