Oaktree Strategic Income (NASDAQ: OCSI) and Arlington Asset Investment (NYSE:AI) are both small-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, profitability, analyst recommendations, institutional ownership, dividends, valuation and earnings.
Earnings and Valuation
This table compares Oaktree Strategic Income and Arlington Asset Investment’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Oaktree Strategic Income||$46.57 million||5.32||-$8.76 million||$0.76||11.05|
|Arlington Asset Investment||$121.25 million||2.58||$17.43 million||$0.66||16.85|
Oaktree Strategic Income pays an annual dividend of $0.56 per share and has a dividend yield of 6.7%. Arlington Asset Investment pays an annual dividend of $2.20 per share and has a dividend yield of 19.8%. Oaktree Strategic Income pays out 73.7% of its earnings in the form of a dividend. Arlington Asset Investment pays out 333.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Insider and Institutional Ownership
28.1% of Oaktree Strategic Income shares are held by institutional investors. Comparatively, 37.6% of Arlington Asset Investment shares are held by institutional investors. 0.4% of Oaktree Strategic Income shares are held by company insiders. Comparatively, 2.8% of Arlington Asset Investment shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
This table compares Oaktree Strategic Income and Arlington Asset Investment’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Oaktree Strategic Income||-8.28%||6.91%||3.43%|
|Arlington Asset Investment||-36.30%||-12.39%||-1.03%|
Risk & Volatility
Oaktree Strategic Income has a beta of 0.25, suggesting that its stock price is 75% less volatile than the S&P 500. Comparatively, Arlington Asset Investment has a beta of 0.66, suggesting that its stock price is 34% less volatile than the S&P 500.
This is a breakdown of recent recommendations for Oaktree Strategic Income and Arlington Asset Investment, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Oaktree Strategic Income||0||2||0||0||2.00|
|Arlington Asset Investment||0||3||1||0||2.25|
Oaktree Strategic Income presently has a consensus target price of $9.25, suggesting a potential upside of 10.12%. Arlington Asset Investment has a consensus target price of $13.31, suggesting a potential upside of 19.72%. Given Arlington Asset Investment’s stronger consensus rating and higher possible upside, analysts plainly believe Arlington Asset Investment is more favorable than Oaktree Strategic Income.
Arlington Asset Investment beats Oaktree Strategic Income on 10 of the 16 factors compared between the two stocks.
Oaktree Strategic Income Company Profile
Oaktree Strategic Income Corporation, formerly Fifth Street Senior Floating Rate Corp., is a closed-end, non-diversified management investment company. The Company operates as a specialty finance company. The Company’s investment objective is to maximize its portfolio’s total return by generating current income from its debt investments while seeking to preserve its capital. The Company invests in senior secured loans, including first lien, unitranche and second lien debt instruments. The Company may also invest in unsecured loans, including subordinated loans, issued by private middle market companies, and senior and subordinated loans issued by public companies and equity investments. The senior loans that the Company targets have final maturities of 4 to 7 years. The Company seeks to invest in senior loans made primarily to private middle market companies. The Company’s investment advisor is Oaktree Capital Management, L.P.
Arlington Asset Investment Company Profile
Arlington Asset Investment Corp. (NYSE: AI) is a principal investment firm that currently invests primarily in mortgage-related and other assets. The Company is headquartered in the Washington, D.C. metropolitan area. For more information, please visit www.arlingtonasset.com.
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