Financial Analysis: Altaba (AABA) & Oaktree Strategic Income (OCSI)

Altaba (NASDAQ: AABA) and Oaktree Strategic Income (NASDAQ:OCSI) are both financials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, valuation, analyst recommendations and dividends.

Valuation and Earnings

This table compares Altaba and Oaktree Strategic Income’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Altaba $5.17 billion 12.57 -$214.32 million $1.87 39.79
Oaktree Strategic Income $46.57 million 5.18 -$8.76 million ($0.31) -26.39

Oaktree Strategic Income has lower revenue, but higher earnings than Altaba. Oaktree Strategic Income is trading at a lower price-to-earnings ratio than Altaba, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

80.2% of Altaba shares are owned by institutional investors. Comparatively, 0.9% of Oaktree Strategic Income shares are owned by institutional investors. 24.0% of Altaba shares are owned by insiders. Comparatively, 0.4% of Oaktree Strategic Income shares are owned 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.

Profitability

This table compares Altaba and Oaktree Strategic Income’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Altaba N/A N/A N/A
Oaktree Strategic Income -18.88% 7.20% 3.72%

Dividends

Oaktree Strategic Income pays an annual dividend of $0.76 per share and has a dividend yield of 9.3%. Altaba does not pay a dividend. Oaktree Strategic Income pays out -245.2% of its earnings in the form of a dividend.

Risk & Volatility

Altaba has a beta of 2.01, indicating that its stock price is 101% more volatile than the S&P 500. Comparatively, Oaktree Strategic Income has a beta of 0.26, indicating that its stock price is 74% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings for Altaba and Oaktree Strategic Income, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Altaba 0 6 5 0 2.45
Oaktree Strategic Income 0 2 0 0 2.00

Altaba currently has a consensus price target of $57.44, indicating a potential downside of 22.79%. Oaktree Strategic Income has a consensus price target of $9.25, indicating a potential upside of 13.08%. Given Oaktree Strategic Income’s higher possible upside, analysts plainly believe Oaktree Strategic Income is more favorable than Altaba.

Summary

Altaba beats Oaktree Strategic Income on 10 of the 16 factors compared between the two stocks.

Altaba Company Profile

Altaba Inc. (the Fund), formerly Yahoo! Inc., is a non-diversified, closed-end management investment company. The Fund seeks to track the combined investment return of the Alibaba Shares and the Yahoo Japan Shares it owns. Alibaba Shares represent an approximate 15% equity interest in Alibaba Group Holding Limited (Alibaba), and its Yahoo Japan Corporation ((Yahoo Japa) Shares represent an approximate 36% equity interest in Yahoo Japan. In addition to the Alibaba Shares and the Yahoo Japan Shares, the Fund also owns the minority investments, all of the equity interests in Excalibur IP, LLC (which owns the Excalibur IP Assets) and the marketable debt securities portfolio. The Fund’s external investment advisors are BlackRock Advisors, LLC and Morgan Stanley Smith Barney LLC.

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.

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