Analyzing Oaktree Specialty Lending (NASDAQ:OCSL) & Ponce Financial Group (NASDAQ:PDLB)

Ponce Financial Group (NASDAQ:PDLB) and Oaktree Specialty Lending (NASDAQ:OCSL) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, earnings, risk, profitability, analyst recommendations, institutional ownership and valuation.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Ponce Financial Group	14.72%	9.52%	0.91%
Oaktree Specialty Lending	10.58%	9.75%	4.70%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Ponce Financial Group and Oaktree Specialty Lending, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ponce Financial Group	0	1	1	1	3.00
Oaktree Specialty Lending	2	5	0	0	1.71

Oaktree Specialty Lending has a consensus price target of $12.88, suggesting a potential upside of 13.04%. Given Oaktree Specialty Lending’s higher possible upside, analysts plainly believe Oaktree Specialty Lending is more favorable than Ponce Financial Group.

Institutional & Insider Ownership

64.3% of Ponce Financial Group shares are owned by institutional investors. Comparatively, 36.8% of Oaktree Specialty Lending shares are owned by institutional investors. 7.2% of Ponce Financial Group 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 will outperform the market over the long term.

Volatility and Risk

Ponce Financial Group has a beta of 0.67, suggesting that its share price is 33% less volatile than the S&P 500. Comparatively, Oaktree Specialty Lending has a beta of 0.49, suggesting that its share price is 51% less volatile than the S&P 500.

Valuation & Earnings

This table compares Ponce Financial Group and Oaktree Specialty Lending”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ponce Financial Group	$108.32 million	3.78	$28.70 million	$1.19	14.23
Oaktree Specialty Lending	$316.80 million	3.17	$33.92 million	$0.36	31.64

Oaktree Specialty Lending has higher revenue and earnings than Ponce Financial Group. Ponce Financial Group 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.

Summary

Ponce Financial Group beats Oaktree Specialty Lending on 9 of the 15 factors compared between the two stocks.

About Ponce Financial Group

Ponce Financial Group, Inc. operates as the bank holding company for Ponce Bank that provides various banking products and services. It offers various deposit products, including demand accounts, NOW/IOLA, money market, reciprocal deposits, savings accounts, and certificates of deposit to individuals, business entities, and non-profit organizations, as well as individual retirement accounts. The company also provides real estate-secured loans, which includes one-to-four family investor-owned and owner-occupied residential; multifamily residential; nonresidential property; construction and land; commercial and industrial; and business and consumer loans, as well as lines of credit. In addition, it invests in securities, which consist of U.S. Government and federal agency securities and securities issued by government-sponsored or owned enterprises, as well as corporate securities, mortgage-backed securities, and Federal Home Loan Bank stock. Ponce Financial Group, Inc. was founded in 1960 and is headquartered in Bronx, New York.

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.