Oaktree Specialty Lending (NASDAQ:OCSL – Get Free Report) and Forge Global (NYSE:FRGE – Get Free Report) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, earnings, dividends, valuation, profitability and institutional ownership.
Risk and Volatility
Oaktree Specialty Lending has a beta of 0.52, meaning that its share price is 48% less volatile than the S&P 500. Comparatively, Forge Global has a beta of 2.18, meaning that its share price is 118% more volatile than the S&P 500.
Earnings & Valuation
This table compares Oaktree Specialty Lending and Forge Global”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Oaktree Specialty Lending | $316.80 million | 3.30 | $33.92 million | $0.57 | 20.82 |
| Forge Global | $92.88 million | 6.71 | -$66.33 million | ($5.20) | -8.65 |
Oaktree Specialty Lending has higher revenue and earnings than Forge Global. Forge Global 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.
Analyst Recommendations
This is a breakdown of recent recommendations and price targets for Oaktree Specialty Lending and Forge Global, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Oaktree Specialty Lending | 0 | 5 | 0 | 0 | 2.00 |
| Forge Global | 1 | 4 | 0 | 0 | 1.80 |
Oaktree Specialty Lending currently has a consensus price target of $11.83, suggesting a potential downside of 0.31%. Forge Global has a consensus price target of $45.00, suggesting a potential upside of 0.00%. Given Forge Global’s higher probable upside, analysts clearly believe Forge Global is more favorable than Oaktree Specialty Lending.
Institutional & Insider Ownership
36.8% of Oaktree Specialty Lending shares are held by institutional investors. Comparatively, 40.7% of Forge Global shares are held by institutional investors. 0.3% of Oaktree Specialty Lending shares are held by insiders. Comparatively, 4.5% of Forge Global shares are held by 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.
Profitability
This table compares Oaktree Specialty Lending and Forge Global’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Oaktree Specialty Lending | 16.66% | 9.56% | 4.60% |
| Forge Global | -71.87% | -29.06% | -24.63% |
Summary
Oaktree Specialty Lending beats Forge Global on 8 of the 13 factors compared between the two stocks.
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.
About Forge Global
Forge Global Holdings, Inc. operates a financial services platform in California. The company's platform solutions include trading solutions, a platform that connects investors with private company stockholders and enables them to facilitate private share transactions; and custody solutions, a non-depository trust company that enables clients to securely custody and manage assets through an online portal. It also provides data solutions, such as information and insight to navigate, analyze, and make investment decisions to market participants in the private market. The company was founded in 2014 and is headquartered in San Francisco, California.
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