Head-To-Head Review: State Street Corporation (STT) vs. Oaktree Capital Group (OAK)

State Street Corporation (NYSE: STT) and Oaktree Capital Group (NYSE:OAK) are both mid-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, earnings, risk, valuation, analyst recommendations, profitability and institutional ownership.

Analyst Ratings

This is a breakdown of recent ratings and price targets for State Street Corporation and Oaktree Capital Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
State Street Corporation 1 9 3 1 2.29
Oaktree Capital Group 0 5 1 0 2.17

State Street Corporation currently has a consensus target price of $96.38, indicating a potential upside of 3.57%. Oaktree Capital Group has a consensus target price of $49.50, indicating a potential upside of 16.20%. Given Oaktree Capital Group’s higher possible upside, analysts plainly believe Oaktree Capital Group is more favorable than State Street Corporation.

Dividends

State Street Corporation pays an annual dividend of $1.68 per share and has a dividend yield of 1.8%. Oaktree Capital Group pays an annual dividend of $2.24 per share and has a dividend yield of 5.3%. State Street Corporation pays out 29.1% of its earnings in the form of a dividend. Oaktree Capital Group pays out 51.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. State Street Corporation has increased its dividend for 6 consecutive years.

Institutional and Insider Ownership

87.9% of State Street Corporation shares are owned by institutional investors. Comparatively, 22.1% of Oaktree Capital Group shares are owned by institutional investors. 0.7% of State Street Corporation shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Volatility & Risk

State Street Corporation has a beta of 1.36, indicating that its stock price is 36% more volatile than the S&P 500. Comparatively, Oaktree Capital Group has a beta of 0.61, indicating that its stock price is 39% less volatile than the S&P 500.

Earnings & Valuation

This table compares State Street Corporation and Oaktree Capital Group’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
State Street Corporation $10.64 billion 3.24 $2.14 billion $5.77 16.13
Oaktree Capital Group $1.13 billion 5.91 $194.70 million $4.35 9.79

State Street Corporation has higher revenue and earnings than Oaktree Capital Group. Oaktree Capital Group is trading at a lower price-to-earnings ratio than State Street Corporation, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares State Street Corporation and Oaktree Capital Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
State Street Corporation 20.56% 13.03% 1.01%
Oaktree Capital Group 19.04% 18.88% 4.51%

Summary

State Street Corporation beats Oaktree Capital Group on 13 of the 18 factors compared between the two stocks.

About State Street Corporation

State Street Corporation is a financial holding company. The Company operates through two lines of business: Investment Servicing and Investment Management. The Company, through its subsidiary, State Street Bank and Trust Company (State Street Bank), provides a range of financial products and services to institutional investors across the world. Investment servicing line of business performs functions, such as providing institutional investors with clearing, settlement and payment services. The Company operates investment management line of business through State Street Global Advisors (SSGA). SSGA provides a range of investment management, investment research and investment advisory services to corporations, public funds and other investors. Its clients include mutual funds, collective investment funds and other investment pools, corporate and public retirement plans, insurance companies, foundations, endowments and investment managers.

About Oaktree Capital Group

Oaktree Capital Group, LLC (Oaktree) is an investment manager specializing in alternative investments. The Company operates through investment management segment, which consists of the investment management services that the Company provides to its clients. The Company manages investments in a range of strategies within approximately six asset classes, which include corporate debt, convertible securities, distressed debt, control investing, real estate and listed equities. The Funds managed by Oaktree include commingled funds, separate accounts and collateralized loan obligation vehicles (CLOs). The commingled funds include open-end and closed-end limited partnerships in which it makes an investment and for which it serves as the general partner. CLOs are structured finance vehicles in which the Company typically makes an investment and for which it serves as collateral manager. Its clientele includes the United States pension plans and corporations and/or their pension funds.

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