Oaktree Specialty Lending (NASDAQ:OCSL) vs. Virtu Financial (NYSE:VIRT) Financial Analysis

Virtu Financial (NYSE:VIRT) and Oaktree Specialty Lending (NASDAQ:OCSL) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, dividends, earnings, valuation, risk, analyst recommendations and institutional ownership.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Virtu Financial and Oaktree Specialty Lending, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Virtu Financial	1	3	3	0	2.29
Oaktree Specialty Lending	0	6	0	0	2.00

Virtu Financial presently has a consensus price target of $58.80, indicating a potential upside of 6.08%. Oaktree Specialty Lending has a consensus price target of $11.83, indicating a potential downside of 0.56%. Given Virtu Financial’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Virtu Financial is more favorable than Oaktree Specialty Lending.

Dividends

Virtu Financial pays an annual dividend of $0.96 per share and has a dividend yield of 1.7%. Oaktree Specialty Lending pays an annual dividend of $1.20 per share and has a dividend yield of 10.1%. Virtu Financial pays out 15.9% of its earnings in the form of a dividend. Oaktree Specialty Lending pays out 250.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Risk and Volatility

Virtu Financial has a beta of 0.62, meaning that its share price is 38% less volatile than the S&P 500. Comparatively, Oaktree Specialty Lending has a beta of 0.5, meaning that its share price is 50% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Virtu Financial	13.50%	49.06%	4.28%
Oaktree Specialty Lending	14.45%	9.70%	4.64%

Institutional & Insider Ownership

45.8% of Virtu Financial shares are owned by institutional investors. Comparatively, 36.8% of Oaktree Specialty Lending shares are owned by institutional investors. 46.8% of Virtu Financial shares are owned by company insiders. Comparatively, 0.3% of Oaktree Specialty Lending shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Virtu Financial 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
Virtu Financial	$3.63 billion	2.37	$468.36 million	$6.02	9.21
Oaktree Specialty Lending	$316.80 million	3.31	$33.92 million	$0.48	24.79

Virtu Financial has higher revenue and earnings than Oaktree Specialty Lending. Virtu Financial 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.

Summary

Virtu Financial beats Oaktree Specialty Lending on 11 of the 16 factors compared between the two stocks.

About Virtu Financial

Virtu Financial, Inc., a financial services company, provides data, analytics, and connectivity products to clients worldwide. The company operates in two segments, Market Making and Execution Services. Its product suite includes offerings in execution, liquidity sourcing, analytics and broker-neutral, and multi-dealer platforms in workflow technology. The company’s solutions enable clients to trade on various venues across countries and in multiple asset classes, including global equities, ETFs, foreign exchange, futures, fixed income, cryptocurrencies, and other commodities. Its analytics platform provides a range of pre- and post-trade services, data products, and compliance tools for clients to invest, trade, and manage risk across markets. Virtu Financial, Inc. was founded in 2008 and is headquartered in New York, New York.

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.