Ponce Financial Group (NASDAQ:PDLB) & Oaktree Specialty Lending (NASDAQ:OCSL) Critical Analysis
by Mitch Edgeman · The Markets DailyPonce Financial Group (NASDAQ:PDLB – Get Free Report) and Oaktree Specialty Lending (NASDAQ:OCSL – Get Free Report) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, profitability, analyst recommendations, institutional ownership, dividends, valuation and risk.
Institutional and Insider Ownership
64.4% of Ponce Financial Group shares are held by institutional investors. Comparatively, 36.8% of Oaktree Specialty Lending shares are held by institutional investors. 7.2% of Ponce Financial Group shares are held by company insiders. Comparatively, 0.3% of Oaktree Specialty Lending shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Valuation & Earnings
This table compares Ponce Financial 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 | |
| Ponce Financial Group | $194.94 million | 2.04 | $28.70 million | $1.19 | 13.83 |
| Oaktree Specialty Lending | $316.80 million | 3.04 | $33.92 million | $0.36 | 30.39 |
Oaktree Specialty Lending has higher revenue and earnings than Ponce Financial Group. Ponce Financial 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.
Analyst Ratings
This is a summary of current ratings and recommmendations for Ponce Financial Group and Oaktree Specialty Lending, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Ponce Financial Group | 0 | 1 | 1 | 1 | 3.00 |
| Oaktree Specialty Lending | 2 | 5 | 0 | 0 | 1.71 |
Oaktree Specialty Lending has a consensus price target of $12.88, indicating a potential upside of 17.69%. Given Oaktree Specialty Lending’s higher possible upside, analysts clearly believe Oaktree Specialty Lending is more favorable than Ponce Financial Group.
Profitability
This table compares Ponce Financial Group and Oaktree Specialty Lending’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Ponce Financial Group | 14.72% | 9.52% | 0.91% |
| Oaktree Specialty Lending | 10.58% | 9.75% | 4.70% |
Risk & Volatility
Ponce Financial Group has a beta of 0.72, meaning that its share price is 28% less volatile than the S&P 500. Comparatively, Oaktree Specialty Lending has a beta of 0.52, meaning that its share price is 48% less volatile than the S&P 500.
Summary
Ponce Financial Group beats Oaktree Specialty Lending on 8 of the 15 factors compared between the two stocks.
About Ponce Financial Group
Ponce Financial Group, Inc. operates as the bank holding company for Ponce Bank that provides various banking products and services. It offers various deposit products, including demand accounts, NOW/IOLA, money market, reciprocal deposits, savings accounts, and certificates of deposit to individuals, business entities, and non-profit organizations, as well as individual retirement accounts. The company also provides real estate-secured loans, which includes one-to-four family investor-owned and owner-occupied residential; multifamily residential; nonresidential property; construction and land; commercial and industrial; and business and consumer loans, as well as lines of credit. In addition, it invests in securities, which consist of U.S. Government and federal agency securities and securities issued by government-sponsored or owned enterprises, as well as corporate securities, mortgage-backed securities, and Federal Home Loan Bank stock. Ponce Financial Group, Inc. was founded in 1960 and is headquartered in Bronx, New York.
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.