Barings Bdc (NYSE:BBDC) and Oxford Square Capital (NASDAQ:OXSQ) Financial Review

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

Dividends

Barings Bdc pays an annual dividend of $1.04 per share and has a dividend yield of 11.7%. Oxford Square Capital pays an annual dividend of $0.42 per share and has a dividend yield of 22.8%. Barings Bdc pays out 107.2% 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 pays out -1,050.0% of its earnings in the form of a dividend. Barings Bdc has raised its dividend for 3 consecutive years. Oxford Square Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider & Institutional Ownership

44.1% of Barings Bdc shares are held by institutional investors. Comparatively, 6.4% of Oxford Square Capital shares are held by institutional investors. 0.5% of Barings Bdc shares are held by company insiders. Comparatively, 8.6% of Oxford Square Capital shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Barings Bdc and Oxford Square Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Barings Bdc	35.67%	9.76%	4.26%
Oxford Square Capital	-3.35%	15.19%	8.11%

Analyst Ratings

This is a breakdown of current recommendations and price targets for Barings Bdc and Oxford Square Capital, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Barings Bdc	0	2	2	0	2.50
Oxford Square Capital	1	0	0	0	1.00

Barings Bdc currently has a consensus target price of $9.67, indicating a potential upside of 9.04%. Given Barings Bdc’s stronger consensus rating and higher possible upside, equities analysts clearly believe Barings Bdc is more favorable than Oxford Square Capital.

Earnings and Valuation

This table compares Barings Bdc and Oxford Square Capital”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Barings Bdc	$114.20 million	8.16	$110.29 million	$0.97	9.14
Oxford Square Capital	$1.81 million	82.89	$5.88 million	($0.04)	-46.00

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

Risk & Volatility

Barings Bdc has a beta of 0.7, meaning that its stock price is 30% less volatile than the S&P 500. Comparatively, Oxford Square Capital has a beta of 0.65, meaning that its stock price is 35% less volatile than the S&P 500.

Summary

Barings Bdc beats Oxford Square Capital on 11 of the 17 factors compared between the two stocks.

About Barings Bdc

Barings BDC, Inc. is a publicly traded, externally managed investment company that has elected to be treated as a business development company under the Investment Company Act of 1940. It seeks to invest primarily in senior secured loans, first lien debt, unitranche, second lien debt, subordinated debt, equity co-investments and senior secured private debt investments in private middle-market companies that operate across a wide range of industries. It specializes in mezzanine, leveraged buyouts, management buyouts, ESOPs, change of control transactions, acquisition financings, growth financing, and recapitalizations in lower middle market, mature, and later stage companies. It invests in manufacturing and distribution; business services and technology; transportation and logistics; consumer product and services. It invests in United States. It invests in companies with EBITDA of $10 million to $75 million, typically in private equity sponsor backed.

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.