Is Oaktree Specialty Lending Corp. overvalued or undervalued?

As of 19 November 2020, the valuation grade for Oaktree Specialty Lending Corp. moved from risky to very attractive. The company is currently undervalued based on its financial ratios and peer comparison. The P/E ratio stands at 140, while the industry average is significantly lower at approximately 133.65, indicating a premium valuation. The Price to Book Value is 0.86, and the EV to EBIT and EV to EBITDA ratios are both at 8.71, suggesting that the company is trading at a reasonable valuation relative to its earnings potential.
In comparison to its peers, Oaktree Specialty Lending Corp. has a higher P/E ratio than the average of 133.65, yet its EV to EBITDA ratio aligns closely with the industry standard. Notably, the company boasts an extraordinary dividend yield of 1294.57%, which further enhances its attractiveness to income-focused investors. Despite recent underperformance against the S&P 500, with a year-to-date return of -11.26% compared to the index's 2.44%, the underlying fundamentals suggest that Oaktree Specialty Lending Corp. presents a compelling investment opportunity at its current price.