Reviewing Oaktree Capital Group (OAK) & Noah Holdings (NOAH)

Oaktree Capital Group (NYSE: OAK) and Noah Holdings (NYSE:NOAH) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, profitability, analyst recommendations, dividends, risk, valuation and institutional ownership.

Valuation & Earnings

This table compares Oaktree Capital Group and Noah Holdings’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Oaktree Capital Group $1.51 billion 1.98 $497.59 million $4.57 10.19
Noah Holdings $404.86 million 4.19 $121.33 million $1.73 17.36

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

Risk & Volatility

Oaktree Capital Group has a beta of 0.61, indicating that its stock price is 39% less volatile than the S&P 500. Comparatively, Noah Holdings has a beta of 2.37, indicating that its stock price is 137% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and target prices for Oaktree Capital Group and Noah Holdings, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Oaktree Capital Group 1 5 1 0 2.00
Noah Holdings 0 0 1 0 3.00

Oaktree Capital Group presently has a consensus price target of $47.20, indicating a potential upside of 1.40%. Noah Holdings has a consensus price target of $29.00, indicating a potential downside of 3.43%. Given Oaktree Capital Group’s higher probable upside, equities research analysts plainly believe Oaktree Capital Group is more favorable than Noah Holdings.

Institutional and Insider Ownership

21.8% of Oaktree Capital Group shares are held by institutional investors. Comparatively, 41.5% of Noah Holdings shares are held by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Dividends

Oaktree Capital Group pays an annual dividend of $5.24 per share and has a dividend yield of 11.3%. Noah Holdings does not pay a dividend. Oaktree Capital Group pays out 114.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares Oaktree Capital Group and Noah Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Oaktree Capital Group 19.17% 20.11% 4.95%
Noah Holdings 29.39% 18.42% 11.94%

Summary

Noah Holdings beats Oaktree Capital Group on 8 of the 14 factors compared between the two stocks.

Oaktree Capital Group Company Profile

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.

Noah Holdings Company Profile

Noah Holdings Limited is a wealth management service provider with a focus on global wealth investment and asset allocation services for high net worth individuals and enterprises in China. The Company operates through three segments: wealth management, asset management and Internet finance. It also provides Internet finance services to clients in China. It provides direct access to China’s high net worth population. With approximately 1,100 relationship managers in over 130 branch offices, its coverage network includes China’s regions where high net worth population is concentrated, including the Yangtze River Delta, the Pearl River Delta, the Bohai Rim and other regions. Its product offerings consist primarily of over-the-counter (OTC) wealth management and OTC asset management products, mutual fund products and asset management plans originated in China and designed to cater to the needs of China’s high net worth population.

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