Financial Contrast: Oaktree Capital Group (OAK) versus BlackRock (BLK)
Oaktree Capital Group (NYSE: OAK) and BlackRock (NYSE:BLK) are both mid-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, risk, profitability, dividends, valuation, analyst recommendations and institutional ownership.
Risk and Volatility
Oaktree Capital Group has a beta of 0.61, suggesting that its share price is 39% less volatile than the S&P 500. Comparatively, BlackRock has a beta of 1.71, suggesting that its share price is 71% more volatile than the S&P 500.
This table compares Oaktree Capital Group and BlackRock’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Oaktree Capital Group||19.17%||20.11%||4.95%|
Oaktree Capital Group pays an annual dividend of $5.24 per share and has a dividend yield of 11.7%. BlackRock pays an annual dividend of $10.00 per share and has a dividend yield of 2.4%. Oaktree Capital Group pays out 114.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. BlackRock pays out 48.0% of its earnings in the form of a dividend. Oaktree Capital Group has increased its dividend for 7 consecutive years. Oaktree Capital Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation & Earnings
This table compares Oaktree Capital Group and BlackRock’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Oaktree Capital Group||$1.51 billion||1.91||$497.59 million||$4.57||9.81|
|BlackRock||$11.52 billion||5.86||$5.06 billion||$20.84||19.96|
BlackRock has higher revenue and earnings than Oaktree Capital Group. Oaktree Capital Group is trading at a lower price-to-earnings ratio than BlackRock, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
22.5% of Oaktree Capital Group shares are owned by institutional investors. Comparatively, 82.8% of BlackRock shares are owned by institutional investors. 1.9% of BlackRock shares are owned 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.
This is a summary of recent recommendations for Oaktree Capital Group and BlackRock, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Oaktree Capital Group||1||5||2||0||2.13|
Oaktree Capital Group presently has a consensus price target of $47.20, suggesting a potential upside of 5.24%. BlackRock has a consensus price target of $448.00, suggesting a potential upside of 7.71%. Given BlackRock’s stronger consensus rating and higher probable upside, analysts clearly believe BlackRock is more favorable than Oaktree Capital Group.
BlackRock beats Oaktree Capital Group on 13 of the 17 factors compared between the two stocks.
Oaktree Capital Group Company Profile
Oaktree Capital Group, LLC (Oaktree) is an investment manager specializing in alternative investments. The Company operates through investment management segment, which consists of the investment management services that the Company provides to its clients. The Company manages investments in a range of strategies within approximately six asset classes, which include corporate debt, convertible securities, distressed debt, control investing, real estate and listed equities. The Funds managed by Oaktree include commingled funds, separate accounts and collateralized loan obligation vehicles (CLOs). The commingled funds include open-end and closed-end limited partnerships in which it makes an investment and for which it serves as the general partner. CLOs are structured finance vehicles in which the Company typically makes an investment and for which it serves as collateral manager. Its clientele includes the United States pension plans and corporations and/or their pension funds.
BlackRock Company Profile
BlackRock, Inc. (BlackRock) is an investment management company. BlackRock provides a range of investment and risk management services to institutional and retail clients worldwide. Its diverse platform of active (alpha) and index (beta) investment strategies across asset classes enables the Company to tailor investment outcomes and asset allocation solutions for clients. Its product offerings include single- and multi-asset portfolios investing in equities, fixed income, alternatives and money market instruments. Its products are offered directly and through intermediaries in a range of vehicles, including open-end and closed-end mutual funds, iShares exchange-traded funds (ETFs), separate accounts, collective investment funds and other pooled investment vehicles. It offers its Aladdin investment system, as well as risk management, outsourcing, advisory and technology services, to institutional investors and wealth management intermediaries under the BlackRock Solutions name.
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