Critical Survey: Palmer Square Capital BDC (NYSE:PSBD) and Oxford Square Capital (NASDAQ:OXSQ)

Oxford Square Capital (NASDAQ:OXSQ) and Palmer Square Capital BDC (NYSE:PSBD) are both small-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, institutional ownership, risk, valuation, dividends, profitability and analyst recommendations.

Institutional and Insider Ownership

6.4% of Oxford Square Capital shares are owned by institutional investors. Comparatively, 6.5% of Palmer Square Capital BDC shares are owned by institutional investors. 10.4% of Oxford Square Capital shares are owned by company insiders. Comparatively, 1.0% of Palmer Square Capital BDC shares are owned 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.

Earnings and Valuation

This table compares Oxford Square Capital and Palmer Square Capital BDC”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Oxford Square Capital	$42.68 million	3.70	$5.88 million	$0.01	221.00
Palmer Square Capital BDC	$143.51 million	3.28	$47.67 million	$0.50	29.06

Palmer Square Capital BDC has higher revenue and earnings than Oxford Square Capital. Palmer Square Capital BDC is trading at a lower price-to-earnings ratio than Oxford Square Capital, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Oxford Square Capital has a beta of 0.66, indicating that its stock price is 34% less volatile than the S&P 500. Comparatively, Palmer Square Capital BDC has a beta of 0.83, indicating that its stock price is 17% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Oxford Square Capital and Palmer Square Capital BDC, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Oxford Square Capital	0	0	0	0	0.00
Palmer Square Capital BDC	0	2	2	0	2.50

Palmer Square Capital BDC has a consensus target price of $14.13, indicating a potential downside of 2.79%. Given Palmer Square Capital BDC’s stronger consensus rating and higher possible upside, analysts plainly believe Palmer Square Capital BDC is more favorable than Oxford Square Capital.

Dividends

Oxford Square Capital pays an annual dividend of $0.42 per share and has a dividend yield of 19.0%. Palmer Square Capital BDC pays an annual dividend of $1.44 per share and has a dividend yield of 9.9%. Oxford Square Capital pays out 4,200.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Palmer Square Capital BDC pays out 288.0% 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 Oxford Square Capital and Palmer Square Capital BDC’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Oxford Square Capital	-1.12%	16.74%	8.75%
Palmer Square Capital BDC	11.72%	11.04%	4.18%

Summary

Palmer Square Capital BDC beats Oxford Square Capital on 10 of the 16 factors compared between the two stocks.

About Oxford Square Capital

Oxford Square Capital Corp. is a business development company, operates as a closed-end, non-diversified management investment company. It is a private equity and mezzanine firm. The firm invests in both public and private companies. It invests in secured and unsecured senior debt, subordinated debt, junior subordinated debt, preferred stock, common stock and syndicated bank loans. 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. Oxford Square Capital Corp., formerly known as TICC Capital Corp., was founded in 2003 and is headquartered in Greenwich, Connecticut.

About Palmer Square Capital BDC

Palmer Square Capital BDC Inc. is an externally managed, non-diversified closed-end management investment company which primarily lends to and invests in corporate debt securities, including small to large private U.S. companies and has elected to be regulated as a business development company. Palmer Square Capital BDC Inc. is based in MISSION WOODS, Kan.