Analyzing Aiful (OTCMKTS:AIFLY) and Oaktree Specialty Lending (NASDAQ:OCSL)

Oaktree Specialty Lending (NASDAQ:OCSL) and Aiful (OTCMKTS:AIFLY) are both financial services companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, risk, profitability, dividends, valuation, institutional ownership and earnings.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Oaktree Specialty Lending	17.21%	11.98%	5.58%
Aiful	N/A	N/A	N/A

Earnings & Valuation

This table compares Oaktree Specialty Lending and Aiful’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Oaktree Specialty Lending	$70.19 million	19.00	$117.33 million	$1.34	12.22
Aiful	N/A	N/A	N/A	$19.42	0.06

Oaktree Specialty Lending has higher revenue and earnings than Aiful. Aiful 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.

Institutional and Insider Ownership

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

Analyst Recommendations

This is a summary of current ratings and price targets for Oaktree Specialty Lending and Aiful, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Oaktree Specialty Lending	0	3	3	0	2.50
Aiful	0	0	0	0	N/A

Oaktree Specialty Lending currently has a consensus target price of $18.42, suggesting a potential upside of 12.50%. Given Oaktree Specialty Lending’s higher probable upside, analysts clearly believe Oaktree Specialty Lending is more favorable than Aiful.

Summary

Oaktree Specialty Lending beats Aiful on 9 of the 10 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 Aiful

Aiful Corporation engages in the consumer finance and credit guarantee business in Japan. The company offers unsecured and small business loans; and credit card, prepaid card, credit guarantee, debt collection, venture capital, receiving agent, corporate turnaround and restructuring, warehouse, document management, and leasing services, as well as used car and medical loans. It also provides postpay settlement, factoring, and installment credit sales services. The company was formerly known as Marutaka, Inc. and changed its name to Aiful Corporation in May 1982. Aiful Corporation was founded in 1967 and is headquartered in Kyoto, Japan.