Contrasting Oaktree Specialty Lending (NASDAQ:OCSL) & Upstart (NASDAQ:UPST)

Upstart (NASDAQ:UPST) and Oaktree Specialty Lending (NASDAQ:OCSL) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, risk, institutional ownership, dividends, profitability, earnings and valuation.

Earnings and Valuation

This table compares Upstart and Oaktree Specialty Lending”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Upstart	$636.53 million	7.45	-$128.58 million	$0.22	221.68
Oaktree Specialty Lending	$316.80 million	3.56	$33.92 million	$0.39	32.79

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

Profitability

This table compares Upstart and Oaktree Specialty Lending’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Upstart	3.33%	3.68%	1.02%
Oaktree Specialty Lending	10.71%	10.31%	4.99%

Volatility and Risk

Upstart has a beta of 2.27, suggesting that its share price is 127% more volatile than the S&P 500. Comparatively, Oaktree Specialty Lending has a beta of 0.52, suggesting that its share price is 48% less volatile than the S&P 500.

Insider and Institutional Ownership

63.0% of Upstart shares are owned by institutional investors. Comparatively, 36.8% of Oaktree Specialty Lending shares are owned by institutional investors. 16.7% of Upstart shares are owned by company insiders. Comparatively, 0.3% of Oaktree Specialty Lending shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and target prices for Upstart and Oaktree Specialty Lending, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Upstart	2	5	5	0	2.25
Oaktree Specialty Lending	0	7	0	0	2.00

Upstart presently has a consensus price target of $60.50, indicating a potential upside of 24.05%. Oaktree Specialty Lending has a consensus price target of $14.25, indicating a potential upside of 11.42%. Given Upstart’s stronger consensus rating and higher probable upside, equities analysts clearly believe Upstart is more favorable than Oaktree Specialty Lending.

Summary

Upstart beats Oaktree Specialty Lending on 9 of the 14 factors compared between the two stocks.

About Upstart

Upstart Holdings, Inc., together with its subsidiaries, operates a cloud-based artificial intelligence (AI) lending platform in the United States. Its platform includes personal loans, automotive retail and refinance loans, home equity lines of credit, and small dollar loans that connects consumer demand for loans to its to bank and credit unions. Upstart Holdings, Inc. was founded in 2012 and is headquartered in San Mateo, California.

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.