Atlanticus (NASDAQ:ATLC) and Oaktree Specialty Lending (NASDAQ:OCSL) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their dividends, analyst recommendations, risk, profitability, institutional ownership, valuation and earnings.
Volatility & Risk
Atlanticus has a beta of 0.09, meaning that its share price is 91% less volatile than the S&P 500. Comparatively, Oaktree Specialty Lending has a beta of 0.58, meaning that its share price is 42% less volatile than the S&P 500.
Insider & Institutional Ownership
14.9% of Atlanticus shares are held by institutional investors. Comparatively, 43.9% of Oaktree Specialty Lending shares are held by institutional investors. 34.3% of Atlanticus shares are held by company insiders. Comparatively, 0.2% of Oaktree Specialty Lending shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
This table compares Atlanticus and Oaktree Specialty Lending’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%|
Earnings and Valuation
This table compares Atlanticus and Oaktree Specialty Lending’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Atlanticus||$121.14 million||0.49||-$40.78 million||N/A||N/A|
|Oaktree Specialty Lending||$138.72 million||5.03||$46.76 million||$0.43||11.51|
Oaktree Specialty Lending has higher revenue and earnings than Atlanticus.
Oaktree Specialty Lending pays an annual dividend of $0.38 per share and has a dividend yield of 7.7%. Atlanticus does not pay a dividend. 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.
This is a breakdown of current recommendations for Atlanticus and Oaktree Specialty Lending, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Oaktree Specialty Lending||0||2||3||0||2.60|
Oaktree Specialty Lending has a consensus price target of $5.45, suggesting a potential upside of 10.10%. Given Oaktree Specialty Lending’s higher probable upside, analysts clearly believe Oaktree Specialty Lending is more favorable than Atlanticus.
Oaktree Specialty Lending beats Atlanticus on 11 of the 13 factors compared between the two stocks.
Atlanticus Holdings Corporation provides credit and related financial services and products to financially underserved consumer credit market in the United States. It operates in two segments, Credit and Other Investments, and Auto Finance. The Credit and Other Investments segment originates a range of consumer loan products, such as retail credit, personal loans, and credit cards through various channels, including retail point-of-sale, direct mail solicitation, Internet-based marketing, and partnerships with third parties; and offers point-of-sale financing by partnering with retailers and service providers to provide credit to their customers for the purchase of various goods and services. This segment also invests in and services portfolios of credit card receivables. In addition, this segment offers loan servicing, such as risk management and customer service outsourcing for third parties; and engages in testing and investment activities in consumer finance technology platforms. The Auto Finance segment purchases and/or services loans secured by automobiles from or for a pre-qualified network of independent automotive dealers and automotive finance companies in the buy-here, pay-here, and used car business. This segment also provides floor plan financing and installment lending products. The company was formerly known as CompuCredit Holdings Corporation and changed its name to Atlanticus Holdings Corporation in November 2012. Atlanticus Holdings Corporation was founded in 1996 and is headquartered in Atlanta, Georgia.
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.
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