Franklin Resources (NYSE:BEN) vs. Oaktree Specialty Lending (NASDAQ:OCSL) Head-To-Head Review

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

Profitability

This table compares Oaktree Specialty Lending and Franklin Resources’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Oaktree Specialty Lending	14.45%	9.70%	4.64%
Franklin Resources	8.72%	11.55%	4.46%

Volatility and Risk

Oaktree Specialty Lending has a beta of 0.52, suggesting that its share price is 48% less volatile than the S&P 500. Comparatively, Franklin Resources has a beta of 1.55, suggesting that its share price is 55% more volatile than the S&P 500.

Institutional and Insider Ownership

36.8% of Oaktree Specialty Lending shares are held by institutional investors. Comparatively, 47.6% of Franklin Resources shares are held by institutional investors. 0.3% of Oaktree Specialty Lending shares are held by company insiders. Comparatively, 23.4% of Franklin Resources shares are held 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.

Earnings & Valuation

This table compares Oaktree Specialty Lending and Franklin Resources”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Oaktree Specialty Lending	$53.53 million	19.58	$33.92 million	$0.48	24.79
Franklin Resources	$9.32 billion	1.79	$524.90 million	$1.47	22.30

Franklin Resources has higher revenue and earnings than Oaktree Specialty Lending. Franklin Resources 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.

Analyst Recommendations

This is a summary of current recommendations for Oaktree Specialty Lending and Franklin Resources, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Oaktree Specialty Lending	0	6	0	0	2.00
Franklin Resources	1	6	3	0	2.20

Oaktree Specialty Lending presently has a consensus price target of $11.83, indicating a potential downside of 0.56%. Franklin Resources has a consensus price target of $35.38, indicating a potential upside of 7.90%. Given Franklin Resources’ stronger consensus rating and higher probable upside, analysts clearly believe Franklin Resources is more favorable than Oaktree Specialty Lending.

Dividends

Oaktree Specialty Lending pays an annual dividend of $1.20 per share and has a dividend yield of 10.1%. Franklin Resources pays an annual dividend of $1.32 per share and has a dividend yield of 4.0%. 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. Franklin Resources pays out 89.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Franklin Resources has raised its dividend for 45 consecutive years.

Summary

Franklin Resources beats Oaktree Specialty Lending on 12 of the 17 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 Franklin Resources

Franklin Resources, Inc. is a publicly owned asset management holding company. Through its subsidiaries, the firm provides its services to individuals, institutions, pension plans, trusts, and partnerships. It launches equity, fixed income, balanced, and multi-asset mutual funds through its subsidiaries. The firm invests in the public equity, fixed income, and alternative markets. Franklin Resources, Inc. was founded in 1947 and is based in San Mateo, California with an additional office in Calgary, Canada; Dubai, United Arab Emirates; Edinburgh, United Kingdom; Fort Lauderdale, United States; Hyderabad, India; London, United Kingdom; Rancho Cordova, United states; Shanghai, China; Singapore; Stamford, United States; and Vienna, Austria.