Oxford Square Capital Corp's Dividend Analysis
An in-depth look at the dividend performance and sustainability of Oxford Square Capital Corp (NASDAQ:OXSQ)
Oxford Square Capital Corp (NASDAQ:OXSQ) recently announced a dividend of $0.04 per share, payable on 2023-11-30, with the ex-dividend date set for 2023-11-15. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's delve into Oxford Square Capital Corp's dividend performance and assess its sustainability.
What Does Oxford Square Capital Corp Do?
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Oxford Square Capital Corp is a closed-end, non-diversified management investment company. Its focus is to seek an attractive risk-adjusted total return by investing in corporate debt securities and collateralized loan obligation (CLO) structured finance investments that own corporate debt securities. Its capital is generally used by its corporate borrowers to finance organic growth, acquisitions, recapitalizations, and working capital. The group invests in various industries such as Structured Finance, IT Consulting, Business Services, Utilities, Software, Healthcare, Telecommunication Services, Plastics Manufacturing, and Diversified Insurance.
A Glimpse at Oxford Square Capital Corp's Dividend History
Oxford Square Capital Corp has maintained a consistent dividend payment record since 2004. Dividends are currently distributed on a monthly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Oxford Square Capital Corp's Dividend Yield and Growth
As of today, Oxford Square Capital Corp currently has a 12-month trailing dividend yield of 13.53% and a 12-month forward dividend yield of 13.53%. This suggests an expectation of same dividend payments over the next 12 months.
Over the past three years, Oxford Square Capital Corp's annual dividend growth rate was -21.60%. Extended to a five-year horizon, this rate increased to -14.70% per year. And over the past decade, Oxford Square Capital Corp's annual dividends per share growth rate stands at -10.30%.
Based on Oxford Square Capital Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Oxford Square Capital Corp stock as of today is approximately 6.11%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-06-30, Oxford Square Capital Corp's dividend payout ratio is 0.00.
Oxford Square Capital Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Oxford Square Capital Corp's profitability 3 out of 10 as of 2023-06-30, suggesting the dividend may not be sustainable. The company has reported net profit in 5 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Oxford Square Capital Corp's growth rank of 3 out of 10 suggests that the company has poor growth prospects and thus, the dividend may not be sustainable.
Revenue is the lifeblood of any company, and Oxford Square Capital Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Oxford Square Capital Corp's revenue has increased by approximately -39.50% per year on average, a rate that underperforms than approximately 88.58% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Oxford Square Capital Corp's earnings increased by approximately -35.60% per year on average, a rate that underperforms than approximately 84.18% of global competitors.
Next Steps
In conclusion, while Oxford Square Capital Corp has a history of consistent dividend payments, its negative growth rates and low profitability rank raise questions about the sustainability of its dividends in the long run. It is crucial for investors to consider these factors before making investment decisions. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
