Head-To-Head Comparison: 3i Group (OTCMKTS:TGOPY) versus Oaktree Specialty Lending (NASDAQ:OCSL)

3i Group (OTCMKTS:TGOPY) and Oaktree Specialty Lending (NASDAQ:OCSL) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, dividends, analyst recommendations, earnings, profitability and risk.

Dividends

3i Group pays an annual dividend of $0.20 per share and has a dividend yield of 2.1%. Oaktree Specialty Lending pays an annual dividend of $1.60 per share and has a dividend yield of 14.3%. Oaktree Specialty Lending pays out 444.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Institutional and Insider Ownership

36.8% of Oaktree Specialty Lending shares are owned by institutional investors. 0.3% of Oaktree Specialty Lending shares are owned 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.

Earnings & Valuation

This table compares 3i Group 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
3i Group	$6.37 billion	6.26	N/A	N/A	N/A
Oaktree Specialty Lending	$316.80 million	3.12	$33.92 million	$0.36	31.14

Oaktree Specialty Lending has lower revenue, but higher earnings than 3i Group.

Analyst Ratings

This is a breakdown of current recommendations for 3i Group and Oaktree Specialty Lending, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
3i Group	2	0	4	0	2.33
Oaktree Specialty Lending	2	5	0	0	1.71

Oaktree Specialty Lending has a consensus price target of $13.75, suggesting a potential upside of 22.66%. Given Oaktree Specialty Lending’s higher possible upside, analysts plainly believe Oaktree Specialty Lending is more favorable than 3i Group.

Risk and Volatility

3i Group has a beta of 0.2, meaning that its share price is 80% less volatile than the S&P 500. Comparatively, Oaktree Specialty Lending has a beta of 0.52, meaning that its share price is 48% less volatile than the S&P 500.

Profitability

This table compares 3i Group and Oaktree Specialty Lending’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
3i Group	N/A	N/A	N/A
Oaktree Specialty Lending	10.58%	9.75%	4.70%

Summary

Oaktree Specialty Lending beats 3i Group on 8 of the 13 factors compared between the two stocks.

About 3i Group

3i Group plc is a private equity firm specializing in mature companies, growth capital, middle markets, infrastructure, and management leveraged buyouts and buy-ins. The firm also provides infrastructure financing and debt management. For debt management, it invests in senior and mezzanine corporate debt in typically large and private companies in United Kingdom, Europe, Asia, and North America. It makes private equity investments in business and technology services, financial services, consumer, healthcare, consumption and distribution, media and telecom, renewable energy, wind, and industrial technology sector. Within business and technology services, the firm seeks to invest in sub sectors such as testing, inspection and certification; intelligent outsourcing, BPO and consultancy; human capital including staffing, governance, risk and compliance, services to pharmaceutical companies, vertical application software, education and training businesses; facilities management; support services to industrial sectors such as oil and gas and utilities; human resources outsourcing and advising; recruitment; logistics and infrastructure support services including distribution, waste, and rental. In the consumer sector, it focuses on, multi-unit roll out, omni-channel propositions, niche branded consumer goods, polarization, health and wellness, ageing population, millennials, consumer goods; e-commerce; retail; food and drinks; and leisure. In the healthcare sector, the firm focuses on outsourced medical device manufacturing & services, outsourced pharmaceutical manufacturing & services, bioprocessing supply chain, life science tools and diagnostics, wellness & consumer health products, pharmaceuticals and biotechnology including specialty pharma, generics / OTC, drug delivery, and animal health; healthcare Services including activities such as elderly and specialty care, including caring for people in their own homes, in hospital and in community facilities, as well as operational services such as outsourced support, clinical services and B2B contract services; medical devices and technology including devices, medical equipment and consumables, diagnostics, and healthcare IT. In the industrial sector, it focuses on automotive, chemicals, safety and security, construction, building products and materials, energy, electronics and electrical components, flow control and filtration, mobility, packaging, industrial Services incl. industrial software, oil, gas, and power. Through 3i BIFM Limited and 3i Infrastructure plc the firm makes infrastructure investments where it focuses principally on the utilities including energy transmission and storage, electricity and gas distribution, water, power generation, and communication network; transportation including airports, ports, ferries, toll roads, and rail; and social infrastructure sector including primary and secondary PFI, public private partnerships, healthcare, education, and government accommodation. In infrastructure it invests primarily in utilities, transportation and social infrastructure in the United Kingdom, France, Italy, Europe, and Ireland. The firm prefers to invest in companies across Europe, France, United States, South America, and Asia. It seeks to make new investments in Northern Europe and North America. The firm typically invests between 5 million ($5.59125 million) and 300 million ($335.475 million) in companies with an enterprise value typically between 100 million ($111.825 million) and 500 million ($559.125 million) and sales value between 80 million ($89.46 million) and 1500 million ($1677.38 million). It seeks to take either majority or minority stakes. It seeks to take a board seat in its portfolio companies with regards to infrastructure investments. The firm invests through a combination of third-party and proprietary capital. It invests through its personal capital. 3i Group plc was founded in 1945 and is based in London, United Kingdom with additional offices across Europe, North America, and Asia.

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.