Head to Head Review: Oaktree Capital Group LLC Unit (OAK) and Houlihan Lokey (HLI)
Oaktree Capital Group LLC Unit (NYSE:OAK) and Houlihan Lokey (NYSE:HLI) are both mid-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, valuation, profitability, institutional ownership, analyst recommendations, dividends and risk.
Institutional & Insider Ownership
28.5% of Oaktree Capital Group LLC Unit shares are owned by institutional investors. Comparatively, 52.6% of Houlihan Lokey shares are owned by institutional investors. 80.5% of Houlihan Lokey shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
This is a summary of current ratings for Oaktree Capital Group LLC Unit and Houlihan Lokey, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Oaktree Capital Group LLC Unit||0||7||0||0||2.00|
Oaktree Capital Group LLC Unit currently has a consensus target price of $45.00, indicating a potential downside of 7.69%. Houlihan Lokey has a consensus target price of $51.14, indicating a potential upside of 11.47%. Given Houlihan Lokey’s stronger consensus rating and higher possible upside, analysts plainly believe Houlihan Lokey is more favorable than Oaktree Capital Group LLC Unit.
Risk & Volatility
Oaktree Capital Group LLC Unit has a beta of 0.52, meaning that its share price is 48% less volatile than the S&P 500. Comparatively, Houlihan Lokey has a beta of 1.03, meaning that its share price is 3% more volatile than the S&P 500.
This table compares Oaktree Capital Group LLC Unit and Houlihan Lokey’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Oaktree Capital Group LLC Unit||16.12%||16.17%||3.46%|
Valuation & Earnings
This table compares Oaktree Capital Group LLC Unit and Houlihan Lokey’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Oaktree Capital Group LLC Unit||$1.39 billion||5.52||$223.42 million||$2.63||18.54|
|Houlihan Lokey||$963.36 million||3.12||$172.28 million||$2.39||19.20|
Oaktree Capital Group LLC Unit has higher revenue and earnings than Houlihan Lokey. Oaktree Capital Group LLC Unit is trading at a lower price-to-earnings ratio than Houlihan Lokey, indicating that it is currently the more affordable of the two stocks.
Oaktree Capital Group LLC Unit pays an annual dividend of $3.00 per share and has a dividend yield of 6.2%. Houlihan Lokey pays an annual dividend of $1.08 per share and has a dividend yield of 2.4%. Oaktree Capital Group LLC Unit pays out 114.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Houlihan Lokey pays out 45.2% of its earnings in the form of a dividend. Houlihan Lokey has raised its dividend for 3 consecutive years.
Houlihan Lokey beats Oaktree Capital Group LLC Unit on 11 of the 17 factors compared between the two stocks.
Oaktree Capital Group LLC Unit Company Profile
Oaktree Capital Group, LLC operates as a global investment management firm that focuses on alternative markets. It manage investments in a number of strategies within six asset classes, including distressed debt; corporate debt, including high yield debt and senior loans; control investing; convertible securities; real estate; and listed equities. The company pursues these strategies through closed-end, open-end, and evergreen funds. Oaktree Capital Group, LLC was incorporated on May 15, 2007 and is headquartered in Los Angeles, California.
Houlihan Lokey Company Profile
Houlihan Lokey, Inc., an investment banking company, provides merger and acquisition (M&A), financing, financial restructuring, and financial advisory services worldwide. It operates in three segments: Corporate Finance, Financial Restructuring, and Financial Advisory Services. The Corporate Finance segment offers general financial advisory services; and advises public and private institutions on buy-side and sell-side transactions, leveraged loans, private mezzanine debt, high-yield debt, initial public offerings, follow-ons, convertibles, equity private placements, private equity, and liability management transactions, as well as financial sponsors on various transactions. It also provides financing solutions and capital-raising advisory services for publicly-held and multinational corporations, financial sponsors, and privately-held companies. The Financial Restructuring segment advises debtors, creditors, and other parties-in-interest related to recapitalization/deleveraging transactions. It also provides a range of advisory services, including structuring, negotiation, and confirmation of plans of reorganization; structuring and analysis of exchange offers; corporate viability assessment; dispute resolution and expert testimony; and procuring debtor in possession financing. The Financial Advisory Services segment offers valuations of various assets, such as companies, illiquid debt and equity securities, and intellectual property. It also provides fairness opinions in connection with M&A and other transactions, and solvency opinions in connection with corporate spin-offs and dividend recapitalizations; and other types of financial opinions in connection with other transactions. In addition, this segment offers dispute resolution and strategic consulting services. It serves corporations, financial sponsors, and government agencies. The company was founded in 1972 and is headquartered in Los Angeles, California.
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