Oaktree Capital Group (NYSE: OAK) and UBS AG (NYSE:UBS) are both mid-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their profitability, earnings, risk, analyst recommendations, institutional ownership, dividends and valuation.

Institutional and Insider Ownership

21.8% of Oaktree Capital Group shares are owned by institutional investors. Comparatively, 31.4% of UBS AG shares are owned by institutional investors. 1.0% of UBS AG shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Oaktree Capital Group and UBS AG’s gross 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 1.98 $497.59 million $4.57 10.19
UBS AG $30.32 billion 2.08 $3.94 billion $1.06 16.02

UBS AG has higher revenue and earnings than Oaktree Capital Group. Oaktree Capital Group is trading at a lower price-to-earnings ratio than UBS AG, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Oaktree Capital Group has a beta of 0.61, meaning that its stock price is 39% less volatile than the S&P 500. Comparatively, UBS AG has a beta of 1.25, meaning that its stock price is 25% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Oaktree Capital Group and UBS AG, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Oaktree Capital Group 1 5 1 0 2.00
UBS AG 0 3 6 0 2.67

Oaktree Capital Group presently has a consensus target price of $47.20, suggesting a potential upside of 1.40%. Given Oaktree Capital Group’s higher possible upside, research analysts clearly believe Oaktree Capital Group is more favorable than UBS AG.

Profitability

This table compares Oaktree Capital Group and UBS AG’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%
UBS AG 11.09% 7.80% 0.46%

Dividends

Oaktree Capital Group pays an annual dividend of $5.24 per share and has a dividend yield of 11.3%. UBS AG pays an annual dividend of $0.60 per share and has a dividend yield of 3.5%. 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. UBS AG pays out 56.6% of its earnings in the form of a dividend. Oaktree Capital Group has increased its dividend for 4 consecutive years. Oaktree Capital Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

UBS AG beats Oaktree Capital Group on 10 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.

UBS AG Company Profile

UBS Group AG is a holding company and conducts its operations through UBS AG and its subsidiaries. The Company comprises Corporate Center and five business divisions: Wealth Management, Wealth Management Americas, Personal & Corporate Banking, Asset Management and the Investment Bank. Wealth Management division provides advice and tailored financial services to wealthy private clients around the world, except those served by Wealth Management Americas. Wealth Management Americas division is a wealth manager in the Americas in terms of financial advisor productivity and invested assets by financial advisor. Personal & Corporate Banking division provides financial products and services to private, corporate and institutional clients in Switzerland. Asset Management division provides investment management products and services, platform solutions and advisory support. Investment Bank division provides investment advice, financial solutions and capital markets access.

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