Head to Head Analysis: Jefferies Financial Group (NYSE:JEF) & Blue Owl Capital (NYSE:OBDC)

Blue Owl Capital (NYSE:OBDC) and Jefferies Financial Group (NYSE:JEF) are both mid-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their earnings, institutional ownership, profitability, analyst recommendations, risk, valuation and dividends.

Institutional & Insider Ownership

42.8% of Blue Owl Capital shares are owned by institutional investors. Comparatively, 60.9% of Jefferies Financial Group shares are owned by institutional investors. 0.1% of Blue Owl Capital shares are owned by company insiders. Comparatively, 19.9% of Jefferies Financial Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Blue Owl Capital and Jefferies Financial Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Blue Owl Capital	$1.85 billion	2.91	$800.36 million	$0.70	15.51
Jefferies Financial Group	$10.82 billion	0.95	$710.47 million	$3.58	14.01

Blue Owl Capital has higher earnings, but lower revenue than Jefferies Financial Group. Jefferies Financial Group is trading at a lower price-to-earnings ratio than Blue Owl Capital, indicating that it is currently the more affordable of the two stocks.

Dividends

Blue Owl Capital pays an annual dividend of $1.48 per share and has a dividend yield of 13.6%. Jefferies Financial Group pays an annual dividend of $1.60 per share and has a dividend yield of 3.2%. Blue Owl Capital pays out 211.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Jefferies Financial Group pays out 44.7% of its earnings in the form of a dividend. Blue Owl Capital has raised its dividend for 2 consecutive years and Jefferies Financial Group has raised its dividend for 2 consecutive years.

Analyst Ratings

This is a summary of current recommendations for Blue Owl Capital and Jefferies Financial Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Blue Owl Capital	0	3	4	1	2.75
Jefferies Financial Group	1	4	2	0	2.14

Blue Owl Capital currently has a consensus target price of $13.00, indicating a potential upside of 19.74%. Jefferies Financial Group has a consensus target price of $62.63, indicating a potential upside of 24.83%. Given Jefferies Financial Group’s higher possible upside, analysts clearly believe Jefferies Financial Group is more favorable than Blue Owl Capital.

Profitability

This table compares Blue Owl Capital and Jefferies Financial Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Blue Owl Capital	20.21%	9.76%	4.27%
Jefferies Financial Group	7.58%	9.23%	1.34%

Risk and Volatility

Blue Owl Capital has a beta of 0.62, suggesting that its stock price is 38% less volatile than the S&P 500. Comparatively, Jefferies Financial Group has a beta of 1.54, suggesting that its stock price is 54% more volatile than the S&P 500.

Summary

Blue Owl Capital beats Jefferies Financial Group on 10 of the 17 factors compared between the two stocks.

About Blue Owl Capital

Blue Owl Capital Corporation is a business development company. It specializes in direct and fund of fund investments. The fund makes investments in senior secured, direct lending or unsecured loans, subordinated loans or mezzanine loans and also considers equity-related securities including warrants and preferred stocks also pursues preferred equity investments, first lien, unitranche, and second lien term loans and common equity investments. Within private equity, it seeks to invest in growth, acquisitions, market or product expansion, refinancings and recapitalizations. It seeks to invest in middle market and upper middle market companies based in the United States, with EBITDA between $10 million and $250 million annually and/or annual revenue of $50 million and $2.5 billion at the time of investment. It seeks to invest in investments with maturities typically between three and ten years. It seeks to make investments generally ranging in size between $20 million and $250 million.

About Jefferies Financial Group

Jefferies Financial Group Inc. operates as an investment banking and capital markets firm in the Americas, Europe, the Middle East, and the Asia-Pacific. The company operates in two segments, Investment Banking and Capital Markets, and Asset Management. It provides investment banking, advisory services with respect to mergers or acquisitions, debt financing, restructurings or recapitalizations, and private capital advisory transactions; underwriting and placement services related to corporate debt, municipal bonds, mortgage-backed and asset-backed securities, equity and equity-linked securities, and loan syndication services; and corporate lending services. The company also offers financing, securities lending, and other prime brokerage services; equities research, sales, and trading services; wealth management services; and online foreign exchange trading services. In addition, it provides investment grade distressed debt securities, U.S. and European government and agency securities, municipal bonds, leveraged loans, emerging markets debt, and interest rate and credit index derivative products; and manages and offers services to a diverse group of alternative asset management platforms across a spectrum of investment strategies and asset classes. The company was formerly known as Leucadia National Corporation and changed its name to Jefferies Financial Group Inc. in May 2018. Jefferies Financial Group Inc. was founded in 1962 and is headquartered in New York, New York.