Critical Contrast: Apollo Global Management (NYSE:APO) vs. OFS Credit (NASDAQ:OCCI)

OFS Credit (NASDAQ:OCCI) and Apollo Global Management (NYSE:APO) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, profitability, risk, valuation, earnings, institutional ownership and dividends.

Dividends

OFS Credit pays an annual dividend of $1.38 per share and has a dividend yield of 28.6%. Apollo Global Management pays an annual dividend of $2.04 per share and has a dividend yield of 1.6%. OFS Credit pays out 575.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Apollo Global Management pays out 38.1% of its earnings in the form of a dividend. Apollo Global Management has raised its dividend for 3 consecutive years.

Valuation & Earnings

This table compares OFS Credit and Apollo Global Management”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
OFS Credit	$32.55 million	2.33	$3.78 million	$0.24	20.08
Apollo Global Management	$26.11 billion	2.73	$4.58 billion	$5.35	23.27

Apollo Global Management has higher revenue and earnings than OFS Credit. OFS Credit is trading at a lower price-to-earnings ratio than Apollo Global Management, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current ratings and price targets for OFS Credit and Apollo Global Management, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
OFS Credit	0	0	0	0	0.00
Apollo Global Management	0	4	11	1	2.81

Apollo Global Management has a consensus target price of $162.57, suggesting a potential upside of 30.60%. Given Apollo Global Management’s stronger consensus rating and higher possible upside, analysts clearly believe Apollo Global Management is more favorable than OFS Credit.

Institutional and Insider Ownership

23.8% of OFS Credit shares are owned by institutional investors. Comparatively, 77.1% of Apollo Global Management shares are owned by institutional investors. 1.0% of OFS Credit shares are owned by insiders. Comparatively, 8.2% of Apollo Global Management shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Risk and Volatility

OFS Credit has a beta of 0.65, meaning that its share price is 35% less volatile than the S&P 500. Comparatively, Apollo Global Management has a beta of 1.68, meaning that its share price is 68% more volatile than the S&P 500.

Profitability

This table compares OFS Credit and Apollo Global Management’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
OFS Credit	N/A	N/A	N/A
Apollo Global Management	13.25%	13.38%	1.05%

Summary

Apollo Global Management beats OFS Credit on 17 of the 18 factors compared between the two stocks.

About OFS Credit

OFS Credit Company, Inc. is a fund of OFS Advisor.

About Apollo Global Management

Apollo Global Management, Inc. is a private equity firm specializing in investments in credit, private equity, infrastructure, secondaries and real estate markets. The firm prefers to invest in private and public markets. The firm’s private equity investments include traditional buyouts, recapitalization, distressed buyouts and debt investments in real estate, corporate partner buyouts, distressed asset, corporate carve-outs, middle market, growth, venture capital, turnaround, bridge, corporate restructuring, special situation, acquisition, and industry consolidation transactions. For credit strategies, the firm focuses to invest in multi-sector credit, semi-liquid credit, direct lending, first lien, unitranche, whole loans and private credit. The firm provides its services to endowment and sovereign wealth funds, as well as other institutional and individual investors. It manages client focused portfolios. The firm launches and manages hedge funds for its clients. It also manages real estate funds and private equity funds for its clients. The firm invests in the fixed income and alternative investment markets across the globe. Its fixed income investments include income-oriented senior loans, bonds, collateralized loan obligations, structured credit, opportunistic credit, non-performing loans, distressed debt, mezzanine debt, and value oriented fixed income securities. The firm seeks to invest in chemicals, commodities, consumer and retail, oil and gas, metals, mining, agriculture, commodities, distribution and transportation, financial and business services, manufacturing and industrial, media distribution, cable, entertainment and leisure, telecom, technology, natural resources, energy, packaging and materials, and satellite and wireless industries. It also focuses on clean energy, sustainable industry, climate solutions, energy transition, industrial decarbonization, sustainable mobility, sustainable resource use, and sustainable real estate. It seeks to invest in companies based in across Africa, Asia, North America with a focus on United States, Western Europe and Europe. It employs a combination of contrarian, value, and distressed strategies to make its investments. The firm seeks to make investments in the range of $75 million and $1500 million. The firm seeks to invest in companies with Enterprise value between $750 million to $2500 million. The firm conducts in-house research to create its investment portfolio. It seeks to acquire minority and majority positions in its portfolio companies. Apollo Global Management, Inc. was founded in 1990 and is headquartered in New York, New York with additional offices in North America, Asia, Africa and Europe.