Contrasting Mitsubishi HC Capital (OTCMKTS:MIUFY) & Oaktree Specialty Lending (NASDAQ:OCSL)

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

Dividends

Mitsubishi HC Capital pays an annual dividend of $16.71 per share and has a dividend yield of 120.0%. Oaktree Specialty Lending pays an annual dividend of $2.20 per share and has a dividend yield of 12.9%. Mitsubishi HC Capital pays out 18.9% of its earnings in the form of a dividend. Oaktree Specialty Lending pays out 164.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Mitsubishi HC Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation and Earnings

This table compares Mitsubishi HC Capital 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
Mitsubishi HC Capital	N/A	N/A	N/A	$88.45	0.16
Oaktree Specialty Lending	$70.19 million	19.73	$117.33 million	$1.34	12.69

Oaktree Specialty Lending has higher revenue and earnings than Mitsubishi HC Capital. Mitsubishi HC Capital 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.

Analyst Recommendations

This is a summary of recent recommendations for Mitsubishi HC Capital and Oaktree Specialty Lending, as reported by MarketBeat.com.

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

Oaktree Specialty Lending has a consensus price target of $18.42, indicating a potential upside of 8.27%. Given Oaktree Specialty Lending’s higher possible upside, analysts plainly believe Oaktree Specialty Lending is more favorable than Mitsubishi HC Capital.

Institutional & Insider Ownership

36.8% of Oaktree Specialty Lending shares are owned by institutional investors. 0.3% of Oaktree Specialty Lending shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

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

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

Summary

Oaktree Specialty Lending beats Mitsubishi HC Capital on 9 of the 12 factors compared between the two stocks.

About Mitsubishi HC Capital

Mitsubishi HC Capital Inc., together with its subsidiaries, engages in the lease, installment sale, and other financing activities in Japan, North America, Europe, the Middle and Near East, Asia/Oceania, and internationally. The company operates through Customer Solutions, Global Business, Environment, Energy & Infrastructure, Aviation, Logistics, and Real Estate segments. The company engages in the leasing, management, and development of real estate; rental and leasing; medical equipment; management of fund to support management specializing in the medical and long-term care fields; purchases and sell used goods; and auto leasing services. It offers investment in environment and energy-related companies; renewable energy and infrastructure business; operation and asset management of renewable energy business; and wind power generation. In addition, it offers aircraft leasing and aircraft engine leasing; ship finance; marine container and railway freight car leasing; real estate securitization finance; investment in mobility-related companies; and asset management services. Mitsubishi HC Capital Inc. was incorporated in 1971 and is based in Tokyo, Japan.

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.