Oaktree Specialty Lending (NASDAQ:OCSL) vs. CME Group (NASDAQ:CME) Head-To-Head Review

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

Analyst Ratings

This is a summary of current ratings and target prices for CME Group and Oaktree Specialty Lending, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CME Group	3	6	8	0	2.29
Oaktree Specialty Lending	0	6	0	0	2.00

CME Group currently has a consensus price target of $289.07, indicating a potential upside of 7.50%. Oaktree Specialty Lending has a consensus price target of $11.83, indicating a potential downside of 2.04%. Given CME Group’s stronger consensus rating and higher probable upside, equities analysts clearly believe CME Group is more favorable than Oaktree Specialty Lending.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
CME Group	63.30%	15.60%	2.20%
Oaktree Specialty Lending	14.45%	9.70%	4.64%

Institutional and Insider Ownership

87.7% of CME Group shares are owned by institutional investors. Comparatively, 36.8% of Oaktree Specialty Lending shares are owned by institutional investors. 0.3% of CME Group shares are owned by insiders. Comparatively, 0.3% of Oaktree Specialty Lending shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Dividends

CME Group pays an annual dividend of $5.20 per share and has a dividend yield of 1.9%. Oaktree Specialty Lending pays an annual dividend of $1.20 per share and has a dividend yield of 9.9%. CME Group pays out 44.1% of its earnings in the form of a dividend. Oaktree Specialty Lending pays out 250.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Volatility & Risk

CME Group has a beta of 0.24, meaning that its stock price is 76% less volatile than the S&P 500. Comparatively, Oaktree Specialty Lending has a beta of 0.5, meaning that its stock price is 50% less volatile than the S&P 500.

Valuation and Earnings

This table compares CME 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
CME Group	$6.52 billion	14.83	$4.07 billion	$11.79	22.81
Oaktree Specialty Lending	$316.80 million	3.36	$33.92 million	$0.48	25.17

CME Group has higher revenue and earnings than Oaktree Specialty Lending. CME 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

CME Group beats Oaktree Specialty Lending on 12 of the 16 factors compared between the two stocks.

About CME Group

CME Group Inc., together with its subsidiaries, operates contract markets for the trading of futures and options on futures contracts worldwide. It offers futures and options products based on interest rates, equity indexes, foreign exchange, agricultural commodities, energy, and metals, as well as fixed income and foreign currency trading services. The company also provides clearing house services, including clearing, settling, and guaranteeing futures and options contracts, and cleared swaps products traded through its exchanges; and trade processing and risk mitigation services. In addition, the company offers a range of market data services, including real-time and historical data services. It serves professional traders, financial institutions, institutional and individual investors, corporations, manufacturers, producers, governments, and central banks. The company was formerly known as Chicago Mercantile Exchange Holdings Inc. and changed its name to CME Group Inc. in July 2007. The company was founded in 1898 and is headquartered in Chicago, Illinois.

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.