Financial Analysis: ONEX (OTCMKTS:ONEXF) versus Carlyle Secured Lending (NASDAQ:CGBD)

ONEX (OTCMKTS:ONEXF) and Carlyle Secured Lending (NASDAQ:CGBD) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, risk, profitability, dividends, valuation and earnings.

Earnings & Valuation

This table compares ONEX and Carlyle Secured Lending”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ONEX	$899.00 million	6.25	$617.00 million	$6.68	11.03
Carlyle Secured Lending	$48.70 million	15.05	$69.97 million	$0.51	20.88

ONEX has higher revenue and earnings than Carlyle Secured Lending. ONEX is trading at a lower price-to-earnings ratio than Carlyle Secured Lending, indicating that it is currently the more affordable of the two stocks.

Dividends

ONEX pays an annual dividend of $0.28 per share and has a dividend yield of 0.4%. Carlyle Secured Lending pays an annual dividend of $1.40 per share and has a dividend yield of 13.1%. ONEX pays out 4.2% of its earnings in the form of a dividend. Carlyle Secured Lending pays out 274.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Recommendations

This is a summary of recent ratings for ONEX and Carlyle Secured Lending, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ONEX	0	2	3	0	2.60
Carlyle Secured Lending	0	5	2	0	2.29

Carlyle Secured Lending has a consensus target price of $12.25, suggesting a potential upside of 15.02%. Given Carlyle Secured Lending’s higher possible upside, analysts plainly believe Carlyle Secured Lending is more favorable than ONEX.

Volatility and Risk

ONEX has a beta of 1.25, meaning that its share price is 25% more volatile than the S&P 500. Comparatively, Carlyle Secured Lending has a beta of 0.66, meaning that its share price is 34% less volatile than the S&P 500.

Profitability

This table compares ONEX and Carlyle Secured Lending’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ONEX	63.83%	5.24%	4.21%
Carlyle Secured Lending	14.26%	8.85%	3.90%

Insider & Institutional Ownership

0.7% of ONEX shares are owned by institutional investors. Comparatively, 24.5% of Carlyle Secured Lending shares are owned by institutional investors. 0.4% of Carlyle Secured Lending shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

ONEX beats Carlyle Secured Lending on 9 of the 16 factors compared between the two stocks.

About ONEX

Onex Corporation is a private equity firm specializing in acquisitions and platform acquisitions. The firm makes investments in buyouts, large- middle market, large-cap, mid-cap, and small-cap market and distressed companies. It also invests in recapitalization, growth capital, corporate carve-outs of subsidiaries and mission-critical supply divisions from multinational corporations, operational restructurings of undervalued businesses, and builds up. The firm seeks to invest in technology, electronics manufacturing services, industrial, aerospace, healthcare, retail, restaurants, industrials products, customer care services, metal services, building products, entertainment, gaming, cabinetry products, commercial vehicles, commercial and investment banking, financial services, commercial and multi-unit residential real estate. It invests in global businesses headquartered in North America, including United States and Canada, or Europe. The firm seeks to invest between $125 million and $1 billion in companies that have minimum revenues of $300 million. It does not consider size if the company is in an industry in which the firm already has presence. The firm seeks to make direct as well as co-investments through managed private equity, real estate and credit funds. It seeks to acquire a control position in its portfolio companies. Onex Corporation was founded in 1984 and is based in Toronto, Canada with additional offices in New York, New York; Englewood Cliffs, New Jersey; Boston, Massachusetts and London, United Kingdom.

About Carlyle Secured Lending

Carlyle Secured Lending, Inc. is business development company specializing in first lien debt, senior secured loans, second lien senior secured loan unsecured debt, mezzanine debt and investments in equities. It specializes in directly investing. It specializes in middle market. It targets healthcare and pharmaceutical, aerospace and defense, high tech industries, business services, software, beverage food and tobacco, hotel gamming and leisure, banking finance insurance and in real estate sector. The fund seeks to invest across United States of America, Luxembourg, Cayman Islands, Cyprus, and United Kingdom. It invests in companies with EBITDA between $25 million and $100 million.