Oxford Square Capital Corp. (OXSQ) Stock Analysis and Metrics

Sector: Financial Services Industry: Asset Management CIK: 0001259429

Market Cap 117.87 Mn

P/B 0.75

P/E -87.50

P/S 2.93

ROIC (Qtr) 10.85

Div Yield % 26.00

Rev 1y % (Qtr) -0.98

Total Debt (Qtr) 151.39 Mn

Debt/Equity (Qtr) 0.95

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About

Oxford Square Capital Corp., also known as OXSQ, operates as a closed-end, non-diversified management investment company in the business development sector. The company primarily focuses on generating an attractive risk-adjusted total return by investing in corporate debt securities and collateralized loan obligation (CLO) structured finance investments. Oxford Square Capital Corp.'s revenue is generated through investments in corporate debt securities and CLOs, which are primarily collateralized by senior secured loans made to companies with unrated...

Oxford Square Capital Corp., also known as OXSQ, operates as a closed-end, non-diversified management investment company in the business development sector. The company primarily focuses on generating an attractive risk-adjusted total return by investing in corporate debt securities and collateralized loan obligation (CLO) structured finance investments.

Oxford Square Capital Corp.'s revenue is generated through investments in corporate debt securities and CLOs, which are primarily collateralized by senior secured loans made to companies with unrated or below investment grade debt. The company's investment decisions are guided by extensive analysis of potential portfolio companies' business operations, recurring revenues, cash flow, costs, assets, and other relevant factors.

The company's expertise in credit analysis and monitoring investments, combined with its established transaction sourcing network, puts it in a strong position to provide financing to corporate borrowers and structured finance vehicles. Its senior professionals have developed solid relationships within the investment community over the years, enhancing its credibility and reputation.

Oxford Square Capital Corp.'s competitive advantages include its expertise in evaluating the investment merits of middle-market companies and CLO investment structures, as well as its ability to monitor the credit risk of such investments after closing until full repayment. The company's investment professionals have a deep understanding of the credit markets and are able to identify investment opportunities that may not be available to other investors.

The company's investment portfolio is diversified across a large number of investments, with few investments exceeding 5% of the total portfolio. Its portfolio includes investments in industries such as structured finance, IT consulting, business services, utilities, software, healthcare, telecommunications, and diversified insurance.

Oxford Square Capital Corp.'s customers include a range of corporate borrowers and structured finance vehicles, including private equity funds, companies, brokers, and bankers. The company's strong reputation in the investment community and established transaction sourcing network position it well to continue growing its investment portfolio and providing attractive returns to its shareholders.

Some of the brand names and/or trade names of the company's products and services include corporate debt securities and collateralized loan obligation (CLO) structured finance investments.

Oxford Square Capital Corp. is a well-established investment company with a strong track record of generating attractive returns for its shareholders. Its expertise in credit analysis and monitoring investments, transaction sourcing network, and investment portfolio make it well-positioned to continue providing attractive returns to its shareholders.

Investment thesis

Bull case

Cash position of 50.79M fully covers payables of 1.13M by 44.77x, showing strong vendor relationship management.
Tangible assets of 314.74M provide robust 141.22x coverage of receivables 2.23M, showing strong asset quality.

Bear case

Operating cash flow of (21.80M) provides thin coverage of dividend payments of (29.72M) with a 0.73 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
Free cash flow of (21.80M) represents just -0.72x of debt issuance 30.13M, suggesting concerning reliance on leverage rather than internal cash generation for growth.
Operating cash flow of (21.80M) barely covers operating expenses of 1.10M with a -19.88 ratio, suggesting thin operational efficiency margins and limited flexibility.
Operating cash flow of (21.80M) is outpaced by equity issuance of 31.85M (-0.68 ratio), indicating concerning reliance on equity markets for funding operations.
R&D investment of 0 represents just 0x of SG&A expenses of 3.11M, indicating potential underinvestment in innovation relative to administrative overhead.

Peer comparison

Companies in the Asset Management

S.No.	Ticker	Company	Market Cap	P/E	P/S	Total Debt (Qtr)
1	BLK	BlackRock, Inc.	199.59 Bn	85.40	21.98	15.04 Bn
2	BN	BROOKFIELD Corp /ON/	103.94 Bn	31.52	5.64	262.97 Bn
3	AMP	Ameriprise Financial Inc	88.69 Bn	55.02	7.20	5.89 Bn
4	BX	Blackstone Inc.	88.51 Bn	49.39	10.93	12.89 Bn
5	KKR	KKR & Co. Inc.	55.86 Bn	28.33	13.23	53.12 Bn
6	STT	State Street Corp	46.52 Bn	21.77	3.91	34.72 Bn
7	NTRS	Northern Trust Corp	34.14 Bn	33.31	6.71	15.64 Bn
8	RJF	Raymond James Financial Inc	32.89 Bn	37.63	4.14	5.10 Bn

Industry comparisons

Current Valuation	Value	Ind Avg
EV to Assets EV to Assets	0.68	0.94
EV to Cash from Ops. EV/CFO	63.35	41.10
EV to Debt EV to Debt	1.41	15.28
EV to EBIT EV/EBIT	33.08	23.47
EV to EBITDA EV/EBITDA	6.77	47.80
EV to Free Cash Flow [EV/FCF] EV/FCF	63.35	38.62
EV to Market Cap EV to Market Cap	1.81	7.81
EV to Revenue EV/Rev	5.31	27.38
Price to Book Value [P/B] P/B	0.75	2.34
Price to Earnings [P/E] P/E	-87.50	11.81

Dividend Metrics	Value	Ind Avg
Dividend Coverage Ratio Div Coverage (Qtr)	-0.09	4.66
Dividend Payout Ratio % Div Payout % (Qtr)	-1,050.00	-5.56
Dividend per Basic Share Div per Share (Qtr)	0.42	1.73
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr)	-152.73	49.83
Interest Coverage Int. cover (Qtr)	0.70	25.16

Growth Metrics	Value	Ind Avg
Capex Growth (1y) % Capex Growth (1y) %	0.00	-35.10
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr)	17.60	15.43
Dividend Growth (1y) % Div 1y % (Qtr)	0.00	1.65
EBIAT Growth (1y) % EBIAT 1y % (Qtr)	76.49	-90.82
EBITDA Growth (1y) % EBITDA 1y % (Qtr)	-12.84	35.24
EBIT Growth (1y) % EBIT 1y % (Qtr)	76.49	-22.13
EBT Growth (1y) % EBT 1y % (Qtr)	45.37	-163.05
EPS Growth (1y) % EPS 1y % (Qtr)	60.00	-20.61
FCF Growth (1y) % FCF 1y % (Qtr)	-152.07	220.21
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr)	-12.05	-53.96

Liquidity Ratios	Value	Ind Avg
Asset Utilization Ratio Asset Util Ratio (Qtr)	0.13	0.22
Cash Payout Ratio Cash Payout (Qtr)	-1.36	0.36
Cash Ratio Cash Ratio	0.00	0.38
Current Ratio Current Ratio	0.00	0.86
Debt to Equity Ratio Debt/Equity (Qtr)	0.95	0.70
Interest Cover Ratio Int Coverage (Qtr)	0.70	25.16
Times Interest Earned Times Interest Earned (Qtr)	0.70	25.16

Profitability	Value	Ind Avg
EBITDA Margin % EBITDA Margin % (Qtr)	14.60	-114.76
EBIT Margin % EBIT Margin % (Qtr)	14.56	-127.24
EBT Margin % EBT Margin % (Qtr)	-6.39	-150.97
Gross Margin % Gross Margin % (Qtr)	89.10	67.88
Net Profit Margin % Net Margin % (Qtr)	-6.40	-148.68

Research Tools

Oxford Square Capital Corp. (NASDAQ: OXSQ)

About

Investment thesis

Bull case

Bear case

Peer comparison

Industry comparisons

Research Tools

Oxford Square Capital Corp. (NASDAQ: OXSQ)

About

Investment thesis

Bull case

Bear case

Peer comparison

Industry comparisons

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