Contrasting Rand Capital (NASDAQ:RAND) and Oxford Square Capital (NASDAQ:OXSQ)

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

Dividends

Oxford Square Capital pays an annual dividend of $0.42 per share and has a dividend yield of 28.6%. Rand Capital pays an annual dividend of $1.16 per share and has a dividend yield of 11.4%. Oxford Square Capital pays out -97.7% of its earnings in the form of a dividend. Rand Capital pays out -37.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Oxford Square Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk & Volatility

Oxford Square Capital has a beta of 0.38, suggesting that its share price is 62% less volatile than the S&P 500. Comparatively, Rand Capital has a beta of 0.1, suggesting that its share price is 90% less volatile than the S&P 500.

Valuation and Earnings

This table compares Oxford Square Capital and Rand Capital”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Oxford Square Capital	$40.34 million	3.41	-$18.73 million	($0.43)	-3.42
Rand Capital	$6.47 million	4.66	-$8.04 million	($3.10)	-3.27

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Oxford Square Capital	-92.37%	14.11%	7.02%
Rand Capital	-162.06%	5.87%	5.75%

Analyst Ratings

This is a breakdown of recent ratings and target prices for Oxford Square Capital and Rand Capital, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Oxford Square Capital	1	0	0	0	1.00
Rand Capital	1	0	0	0	1.00

Institutional & Insider Ownership

6.4% of Oxford Square Capital shares are owned by institutional investors. 6.5% of Oxford Square Capital shares are owned by insiders. Comparatively, 68.2% of Rand Capital shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Oxford Square Capital beats Rand Capital on 9 of the 13 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 Rand Capital

Rand Capital Corporation is a business development company specializing in subordinated debt with warrants or preferred equity and venture capital investments. Within private equity, the firm specializing in capital growth and lower middle market investments. Within venture capital, it specializing in early to late-stage private businesses. It does not prefer to invest in real estate sector. It prefers to invest in software, professional services, manufacturing, consumer, healthcare, automotive and public d stocks. It prefers to invest in East or Midwest U.S. operations sectors. It typically invests between $0.75 million and $5 million with initial target size of $1.5 million. It seeks to invest in companies having more than $2 million in revenue or having excess of $1.5 million and up to $5 million in EBITDA. It prefers to be a minority stake and seeks to take a Board seat in its portfolio companies. It typically holds its investments for a period up to five years.