Oaktree Strategic Income (NASDAQ:OCSI) and PennantPark Investment (NASDAQ:PNNT) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, profitability, analyst recommendations, institutional ownership, earnings, valuation and risk.
Insider & Institutional Ownership
35.9% of Oaktree Strategic Income shares are held by institutional investors. Comparatively, 29.9% of PennantPark Investment shares are held by institutional investors. 0.7% of Oaktree Strategic Income shares are held by insiders. Comparatively, 3.0% of PennantPark Investment shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Analyst Ratings
This is a breakdown of recent ratings and price targets for Oaktree Strategic Income and PennantPark Investment, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Oaktree Strategic Income | 0 | 1 | 0 | 0 | 2.00 |
PennantPark Investment | 0 | 1 | 3 | 0 | 2.75 |
Oaktree Strategic Income presently has a consensus target price of $7.00, indicating a potential downside of 17.65%. PennantPark Investment has a consensus target price of $5.00, indicating a potential downside of 22.24%. Given Oaktree Strategic Income's higher probable upside, equities analysts plainly believe Oaktree Strategic Income is more favorable than PennantPark Investment.
Earnings & Valuation
This table compares Oaktree Strategic Income and PennantPark Investment's revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Oaktree Strategic Income | $39.53 million | 6.34 | $-1,270,000.00 | $0.55 | 15.45 |
PennantPark Investment | $100.22 million | 4.30 | $-15,970,000.00 | $0.61 | 10.54 |
Oaktree Strategic Income has higher earnings, but lower revenue than PennantPark Investment. PennantPark Investment is trading at a lower price-to-earnings ratio than Oaktree Strategic Income, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Oaktree Strategic Income and PennantPark Investment's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Oaktree Strategic Income | -3.20% | 6.39% | 2.79% |
PennantPark Investment | -15.93% | 7.56% | 3.07% |
Dividends
Oaktree Strategic Income pays an annual dividend of $0.62 per share and has a dividend yield of 7.3%. PennantPark Investment pays an annual dividend of $0.48 per share and has a dividend yield of 7.5%. Oaktree Strategic Income pays out 112.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. PennantPark Investment pays out 78.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Oaktree Strategic Income has increased its dividend for 1 consecutive years and PennantPark Investment has increased its dividend for 1 consecutive years. PennantPark Investment is clearly the better dividend stock, given its higher yield and lower payout ratio.
Volatility and Risk
Oaktree Strategic Income has a beta of 0.98, suggesting that its stock price is 2% less volatile than the S&P 500. Comparatively, PennantPark Investment has a beta of 1.98, suggesting that its stock price is 98% more volatile than the S&P 500.
Summary
PennantPark Investment beats Oaktree Strategic Income on 11 of the 16 factors compared between the two stocks.