Oxford Square Capital (NASDAQ: OXSQ) and Solar Capital (NASDAQ:SLRC) are both small-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, earnings, analyst recommendations, institutional ownership, valuation, risk and profitability.
Oxford Square Capital pays an annual dividend of $0.80 per share and has a dividend yield of 11.7%. Solar Capital pays an annual dividend of $1.64 per share and has a dividend yield of 7.9%. Oxford Square Capital pays out 133.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Solar Capital pays out 101.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Oxford Square Capital has a beta of 0.45, suggesting that its share price is 55% less volatile than the S&P 500. Comparatively, Solar Capital has a beta of 0.56, suggesting that its share price is 44% less volatile than the S&P 500.
Insider and Institutional Ownership
13.9% of Oxford Square Capital shares are held by institutional investors. Comparatively, 60.2% of Solar Capital shares are held by institutional investors. 5.9% of Oxford Square Capital shares are held by company insiders. Comparatively, 5.9% of Solar Capital shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
This table compares Oxford Square Capital and Solar Capital’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Oxford Square Capital||73.85%||7.95%||5.85%|
This is a breakdown of recent ratings and target prices for Oxford Square Capital and Solar Capital, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Oxford Square Capital||1||0||1||0||2.00|
Oxford Square Capital currently has a consensus price target of $5.00, indicating a potential downside of 26.79%. Solar Capital has a consensus price target of $24.00, indicating a potential upside of 16.17%. Given Solar Capital’s stronger consensus rating and higher possible upside, analysts clearly believe Solar Capital is more favorable than Oxford Square Capital.
Valuation & Earnings
This table compares Oxford Square Capital and Solar Capital’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Oxford Square Capital||$61.42 million||5.60||$43.60 million||$0.60||11.38|
|Solar Capital||$143.34 million||6.09||$70.43 million||$1.62||12.75|
Solar Capital has higher revenue and earnings than Oxford Square Capital. Oxford Square Capital is trading at a lower price-to-earnings ratio than Solar Capital, indicating that it is currently the more affordable of the two stocks.
Solar Capital beats Oxford Square Capital on 11 of the 15 factors compared between the two stocks.
Oxford Square Capital Company Profile
TICC Capital Corp. is a business development company, operates as a closed-end, non-diversified management investment company. The firm invests in both public and private companies. It invests in secured and unsecured senior debt, subordinated debt, junior subordinated debt, preferred stock, and common stock. The firm primarily invests in debt and/or equity securities of technology-related companies that operate in the computer software, Internet, information technology infrastructure and services, media, telecommunications and telecommunications equipment, semiconductors, hardware, technology-enabled services, semiconductor capital equipment, medical device technology, diversified technology, and networking systems sectors. It concentrates its investments in companies having annual revenues of less than $200 million and a market capitalization or enterprise value of less than $300 million. The firm invests between $5 million and $30 million per transaction. It seeks to exit its investments within 7 years. It serves as the investment adviser to TICC. TICC Capital Corp., formerly known as Technology Investment Capital Corp., was founded in 2003 and is headquartered in Greenwich, Connecticut.
Solar Capital Company Profile
Solar Capital Ltd is a business development company that seeks investment opportunities in middle market companies located in the US. The fund targets companies operating in the fields of aerospace & defense, automobile, banking, beverage, food & tobacco, buildings & real estate, broadcasting & entertainment, cargo transport, chemicals, plastics & rubber, containers, packaging & glass, diversified or conglomerate manufacturing, diversified financial services, electronics, farming & agriculture, finance, grocery, healthcare, education & childcare, home, office furnishings & durable consumer products, hotels, motels, inns & gaming, insurance, IT services, leisure, amusement & entertainment, machinery, mining, steel, iron & non-precious metals, personal & nondurable consumer products, personal, food &services, personal transportation, professional services, retail stores, software, telecommunications, textiles and leather, and utilities. It invests in both public & private companies and provides financing for debt, mezzanine and buyout capital requirements with an investment size ranging from $5 to $100 million.
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