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

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

Risk and Volatility

Franklin Resources has a beta of 1.54, meaning that its share price is 54% more 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.

Dividends

Franklin Resources pays an annual dividend of $1.32 per share and has a dividend yield of 4.0%. Oaktree Specialty Lending pays an annual dividend of $1.20 per share and has a dividend yield of 10.0%. 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. 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 has increased its dividend for 45 consecutive years.

Profitability

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

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

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Franklin Resources	$8.77 billion	1.89	$524.90 million	$1.47	22.20
Oaktree Specialty Lending	$316.80 million	3.34	$33.92 million	$0.48	25.00

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.

Institutional & Insider Ownership

47.6% of Franklin Resources shares are held by institutional investors. Comparatively, 36.8% of Oaktree Specialty Lending shares are held by institutional investors. 23.4% of Franklin Resources shares are held by company insiders. Comparatively, 0.3% of Oaktree Specialty Lending shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Franklin Resources and Oaktree Specialty Lending, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Franklin Resources	2	6	4	0	2.17
Oaktree Specialty Lending	0	6	0	0	2.00

Franklin Resources currently has a consensus price target of $33.10, suggesting a potential upside of 1.41%. Oaktree Specialty Lending has a consensus price target of $11.83, suggesting a potential downside of 1.39%. Given Franklin Resources’ stronger consensus rating and higher possible upside, equities analysts plainly believe Franklin Resources is more favorable than Oaktree Specialty Lending.

Summary

Franklin Resources beats Oaktree Specialty Lending on 12 of the 17 factors compared between the two stocks.

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.

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.