Oxford Square Capital Corp. (OXSQ)

Oxford Square Capital Corp. (OXSQ) Financial Services Profile

Oxford Square Capital Corp. (OXSQ) is a business development company specializing in providing debt and equity capital to technology-focused companies with smaller market capitalizations. The company offers investors exposure to private equity and mezzanine financing opportunities within the technology sector, distinguished by a high dividend yield.

What Is the Investment Thesis for OXSQ?

Oxford Square Capital Corp. presents a compelling, albeit high-risk, investment thesis centered on its focus on technology-related companies with high growth potential. With a substantial dividend yield of 23.08%, OXSQ offers significant income potential for investors seeking current yield. The company's strategy of investing in smaller companies with revenues under $200 million allows it to tap into potentially undervalued opportunities. However, the high dividend yield may not be sustainable. Growth catalysts include the continued expansion of the technology sector and the increasing demand for capital from smaller technology companies. The company's ability to effectively manage its portfolio and generate returns will be critical to its long-term success. Key risks include the potential for economic downturns, which could negatively impact the performance of its portfolio companies, and the competitive landscape of the BDC sector.

Based on FMP financials and quantitative analysis

OXSQ Key Highlights

• Market capitalization of $130.47M, indicating a smaller-cap company with potential for growth but also higher volatility.
• Profit margin of 782.1%, suggesting strong profitability from its investment activities, although this may not be sustainable.
• Gross margin of 244.5%, reflecting the efficiency of its investment strategies and the returns generated from its portfolio companies.
• Beta of 0.47, indicating lower volatility compared to the overall market, which may appeal to risk-averse investors.
• Dividend yield of 23.08%, offering a substantial income stream for investors, but also raising questions about sustainability and capital allocation.

Who Are OXSQ's Competitors?

OXSQ is benchmarked below against 8 industry peers on price, market cap, and our AI MoonshotScore.

AI Score by Stock Expert AI · Price data: FMP / Yahoo Finance

What Are OXSQ's Key Strengths?

• High dividend yield of 23.08%.
• Focus on technology-related companies.
• Experience in private equity and mezzanine financing.
• High profit margin of 782.1%.

What Are OXSQ's Weaknesses?

• Small market capitalization of $130.47M.
• Concentration in technology sector.
• Dependence on economic conditions.
• High dividend yield may not be sustainable.

What Could Drive OXSQ Stock Higher?

• Continued growth in the technology sector driving demand for capital.
• Strategic partnerships enhancing deal flow and investment opportunities.
• Focus on recurring revenue models improving portfolio stability.

What Are the Key Risks for OXSQ?

• Financial-distress signal — its Altman Z-Score of -1.94 sits in the distress zone (elevated bankruptcy risk).
• Negative return on equity (-24.7%) — the business is not currently generating profit on shareholder capital.
• Weak fundamentals — a Piotroski F-Score of 2/9 flags soft profitability, leverage or efficiency.
• Economic downturns impacting portfolio company performance.
• Increased competition from other BDCs reducing investment opportunities.
• Regulatory changes affecting BDC operations and investment strategies.

What Are the Growth Opportunities for OXSQ?

• Expansion of Technology Investments: The continued growth of the technology sector presents a significant opportunity for Oxford Square Capital Corp. to expand its investment portfolio. As the demand for technology solutions increases across various industries, smaller technology companies will require capital to scale their operations. By focusing on companies with revenues under $200 million, OXSQ can tap into a niche market with high growth potential. This includes sectors like software, IT services, and medical device technology. The market size for technology investments is projected to reach trillions of dollars by 2030, offering substantial opportunities for OXSQ to deploy capital and generate returns.
• Strategic Partnerships: Forming strategic partnerships with other investment firms and industry players can enhance Oxford Square Capital Corp.'s deal flow and investment expertise. Collaborating with venture capital firms, private equity funds, and technology incubators can provide access to promising investment opportunities and valuable industry insights. These partnerships can also facilitate co-investments and risk-sharing, allowing OXSQ to participate in larger transactions and diversify its portfolio. The timeline for establishing these partnerships is ongoing, with the potential to yield immediate benefits in terms of deal sourcing and investment performance.
• Increased Focus on Recurring Revenue Models: Oxford Square Capital Corp. can enhance its investment portfolio by focusing on technology companies with recurring revenue models, such as software-as-a-service (SaaS) and subscription-based businesses. These companies typically generate more predictable and stable cash flows, reducing investment risk and enhancing long-term returns. The market for SaaS and subscription-based services is experiencing rapid growth, driven by the increasing adoption of cloud computing and digital transformation initiatives. By targeting companies with recurring revenue models, OXSQ can improve the overall quality and stability of its investment portfolio.
• Geographic Expansion: Expanding its investment activities beyond its current geographic focus can provide Oxford Square Capital Corp. with access to new markets and investment opportunities. Exploring emerging technology hubs and regions with high growth potential can diversify its portfolio and reduce concentration risk. This expansion can involve establishing local offices, forming partnerships with regional investment firms, and participating in industry events and conferences. The timeline for geographic expansion will depend on market conditions and the availability of attractive investment opportunities, but it represents a long-term growth driver for the company.
• Enhanced Portfolio Management: Implementing enhanced portfolio management strategies can improve the overall performance of Oxford Square Capital Corp.'s investment portfolio. This includes actively monitoring the performance of its portfolio companies, providing strategic guidance and operational support, and implementing risk management measures to mitigate potential losses. By taking a more hands-on approach to portfolio management, OXSQ can enhance the value of its investments and generate higher returns. This also includes proactively identifying and addressing any challenges or opportunities that may arise within its portfolio companies. The timeline for implementing these strategies is ongoing, with the potential to yield immediate improvements in investment performance.

What Opportunities Does OXSQ Have?

• Expansion of technology investments.
• Strategic partnerships.
• Increased focus on recurring revenue models.
• Geographic expansion.

What Threats Does OXSQ Face?

• Economic downturns.
• Increased competition from other BDCs.
• Regulatory changes.
• Potential for portfolio company failures.

What Are OXSQ's Competitive Advantages?

• Specialized focus on technology-related companies.
• Experience in private equity and mezzanine financing.
• Established track record as a BDC.
• Investment advisor to TICC.

What Does OXSQ Do?

Oxford Square Capital Corp., established in 2003 and headquartered in Greenwich, Connecticut, operates as a business development company (BDC). Formerly known as TICC Capital Corp., the company functions as a closed-end, non-diversified management investment firm. Oxford Square Capital Corp. primarily focuses on private equity and mezzanine investments, targeting both public and private companies, particularly those in technology-related sectors. These sectors include computer software, internet, information technology infrastructure and services, media, telecommunications, semiconductors, and medical device technology. The company's investment strategy involves deploying capital through secured and unsecured senior debt, subordinated debt, junior subordinated debt, preferred stock, common stock, and syndicated bank loans. Oxford Square Capital Corp. concentrates its investments in companies with annual revenues of less than $200 million and a market capitalization or enterprise value below $300 million. The firm typically invests between $5 million and $30 million per transaction, seeking to exit its investments within a seven-year timeframe. Additionally, Oxford Square Capital Corp. serves as the investment advisor to TICC, further solidifying its position within the asset management landscape. The company's approach allows investors to access a diversified portfolio of technology-focused investments, often unavailable through traditional investment channels.

What Products and Services Does OXSQ Offer?

• Invests in secured and unsecured senior debt.
• Invests in subordinated and junior subordinated debt.
• Invests in preferred and common stock.
• Invests in syndicated bank loans.
• Targets technology-related companies.
• Focuses on companies with revenues under $200 million.
• Serves as investment advisor to TICC.

How Does OXSQ Make Money?

• Raises capital through public and private offerings.
• Invests capital in debt and equity securities of technology companies.
• Generates income from interest payments, dividends, and capital gains.
• Manages investments to maximize returns within a 7-year exit strategy.

What Industry Does OXSQ Operate In?

Oxford Square Capital Corp. operates within the asset management industry, specifically as a business development company (BDC). The BDC sector has grown significantly, driven by increased demand for alternative financing solutions from small and medium-sized enterprises. The competitive landscape includes other BDCs and private equity firms. OXSQ differentiates itself by focusing on technology-related companies with smaller market capitalizations. The industry is subject to regulatory oversight and economic cycles, impacting investment strategies and returns.

Who Are OXSQ's Key Customers?

• Technology-related companies seeking capital.
• Public and private companies.
• Companies with annual revenues less than $200 million.
• Companies with market capitalization or enterprise value less than $300 million.

ROE -25%Key Financial Metrics

Return on equity for Oxford Square Capital Corp. stands at -24.7%, a gauge of how efficiently it converts shareholder capital into profit. Return on assets is -13.0%, showing how much profit it generates from its asset base. Its free cash flow yield is -26.0%, a gauge of the cash the business throws off relative to its market value. A current ratio of 15.19 indicates the company holds enough short-term assets to cover its near-term obligations. Its earnings yield is -31.0%, the inverse of the P/E and a quick read on earnings relative to price.

Oxford Square Capital Corp. (OXSQ) Valuation Context

Valued at $130.47M, OXSQ is classified as a micro-cap stock. Relative to its peer group, OXSQ's quantitative score of 36/100 is below the peer average of 70/100.

Company Profile

Oxford Square Capital Corp. operates in the Asset Management industry within the Financial Services sector. It is headquartered in Greenwich, US. The company is led by CEO Jonathan H. Cohen. OXSQ has traded publicly since 2003.

F-Score 2/9Financial Health

Oxford Square Capital Corp.'s Piotroski F-Score is 2/9, a 9-point checklist of profitability, leverage and efficiency — flagging fundamental weakness worth scrutiny. Its Altman Z-Score of -1.94 places it in the distress zone, a signal of elevated financial risk.

FY2026 estForward Outlook

Wall Street analysts project Oxford Square Capital Corp. revenue of about $34.3M for fiscal 2026, with EPS near $0.17.

OXSQ Financials

OXSQ Latest News

OXSQ Analyst Consensus

OXSQ MoonshotScore

What Investors Ask About Oxford Square Capital Corp. (OXSQ) — Financial Services

Disclaimer: This content is for informational purposes only and does not constitute investment advice. Always do your own research and consult a financial advisor.

Official Resources