Comparing OFS Credit (NASDAQ:OCCI) & TPG (NASDAQ:TPG)

OFS Credit (NASDAQ:OCCI) and TPG (NASDAQ:TPG) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, dividends, valuation, profitability, institutional ownership, earnings and analyst recommendations.

Profitability

This table compares OFS Credit and TPG’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
TPG	3.95%	26.02%	7.82%

Valuation and Earnings

This table compares OFS Credit and TPG”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
OFS Credit	$44.15 million	1.94	-$38.11 million	($1.31)	-2.25
TPG	$3.22 billion	4.52	$184.59 million	$0.44	86.20

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

Analyst Ratings

This is a breakdown of current ratings and target prices for OFS Credit and TPG, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
OFS Credit	0	0	0	0	0.00
TPG	0	5	12	0	2.71

TPG has a consensus price target of $65.67, suggesting a potential upside of 73.13%. Given TPG’s stronger consensus rating and higher possible upside, analysts clearly believe TPG is more favorable than OFS Credit.

Institutional and Insider Ownership

23.8% of OFS Credit shares are owned by institutional investors. Comparatively, 94.0% of TPG shares are owned by institutional investors. 1.0% of OFS Credit shares are owned by company insiders. Comparatively, 70.0% of TPG shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Risk and Volatility

OFS Credit has a beta of 0.61, indicating that its stock price is 39% less volatile than the S&P 500. Comparatively, TPG has a beta of 1.54, indicating that its stock price is 54% more volatile than the S&P 500.

Dividends

OFS Credit pays an annual dividend of $1.32 per share and has a dividend yield of 44.7%. TPG pays an annual dividend of $2.44 per share and has a dividend yield of 6.4%. OFS Credit pays out -100.8% of its earnings in the form of a dividend. TPG pays out 554.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. OFS Credit is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

TPG beats OFS Credit on 14 of the 16 factors compared between the two stocks.

About OFS Credit

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

About TPG

TPG Inc. operates as an alternative asset manager in the United States and internationally. The company offers investment management services to TPG Funds, limited partners, and other vehicles. It also offers monitoring services to portfolio companies; advisory, debt and equity arrangement, and underwriting and placement services; and capital structuring and other advisory services to portfolio companies. In addition, the company invests in private equity funds, real estate funds, hedge funds, and credit funds. TPG Inc. was founded in 1992 and is based in Fort Worth, Texas. The company operates as a subsidiary of TPG GP A, LLC.