Head-To-Head Comparison: Oaktree Specialty Lending (NASDAQ:OCSL) vs. Hut 8 (NASDAQ:HUT)

Oaktree Specialty Lending (NASDAQ:OCSL) and Hut 8 (NASDAQ:HUT) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, valuation, profitability, analyst recommendations, institutional ownership, risk and dividends.

Earnings and Valuation

This table compares Oaktree Specialty Lending and Hut 8″s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Oaktree Specialty Lending	$316.80 million	3.54	$33.92 million	$0.39	32.62
Hut 8	$162.38 million	34.11	$331.88 million	($0.39)	-131.46

Hut 8 has lower revenue, but higher earnings than Oaktree Specialty Lending. Hut 8 is trading at a lower price-to-earnings ratio than Oaktree Specialty Lending, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Oaktree Specialty Lending and Hut 8’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Oaktree Specialty Lending	10.71%	10.31%	4.99%
Hut 8	115.39%	8.06%	5.18%

Analyst Recommendations

This is a summary of current recommendations for Oaktree Specialty Lending and Hut 8, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Oaktree Specialty Lending	1	6	0	0	1.86
Hut 8	0	1	16	2	3.05

Oaktree Specialty Lending currently has a consensus price target of $14.25, indicating a potential upside of 12.03%. Hut 8 has a consensus price target of $53.76, indicating a potential upside of 4.87%. Given Oaktree Specialty Lending’s higher possible upside, research analysts clearly believe Oaktree Specialty Lending is more favorable than Hut 8.

Risk and Volatility

Oaktree Specialty Lending has a beta of 0.52, indicating that its share price is 48% less volatile than the S&P 500. Comparatively, Hut 8 has a beta of 4.41, indicating that its share price is 341% more volatile than the S&P 500.

Institutional & Insider Ownership

36.8% of Oaktree Specialty Lending shares are held by institutional investors. Comparatively, 31.8% of Hut 8 shares are held by institutional investors. 0.3% of Oaktree Specialty Lending shares are held by company insiders. Comparatively, 11.2% of Hut 8 shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

Hut 8 beats Oaktree Specialty Lending on 9 of the 15 factors compared between the two stocks.

About Oaktree Specialty Lending

Oaktree Specialty Lending Corporation is a business development company. The fund specializing in investments in middle market, bridge financing, first and second lien debt financing, unsecured and mezzanine loan, mezzanine debt, senior and junior secured debt, expansions, sponsor-led acquisitions, preferred equity, and management buyouts in small and mid-sized companies. It seeks to invest in education services, business services, retail and consumer, healthcare, manufacturing, food and restaurants, construction and engineering. The firm also seeks investment in media, advertising sectors, software, IT services, pharmaceuticals, biotechnology, real estate management and development, chemicals, machinery, and internet and direct marketing retail 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. The firm invest in companies having 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 Hut 8

Hut 8 Corp., together with its subsidiaries, acquires, builds, manages, and operates data centers for digital assets mining, computing, and artificial intelligence in the United States. It operates in four segments: Digital Assets Mining, Managed Services, High Performance Computing Colocation and Cloud, and Other. The company mines Bitcoin. It also offers managed services for energy infrastructure development, such as site design, procurement, and construction management; software automation, process design, personnel hiring, and team training; utilities contracts, hosting operations, and customer management; energy portfolio optimization and strategic initiatives; and finance, accounting, and safety services for digital asset mining site owners, governments, and data center developers. In addition, the company provides colocation, cloud, and connectivity services; hosting services, which include the provision of mining equipment and space, as well as monitors, troubleshoots, repairs, and maintains customer mining equipment; and equipment sales and repair services. Hut 8 Corp. was founded in 2017 and is based in Miami, Florida.