Oxford Square Capital: A Dividend Trap With An Unjustified Risk-Reward Profile

Symeon Mavroudis
430 Followers
(9min)

Summary

  • The stock price of Oxford Square Capital has been in a long-term decline since its Nasdaq listing, which resulted in an 80% value reduction.
  • The Q1 2025 financial results indicate a probable dividend reduction because the net investment income does not meet the current payment level.
  • The stock price exceeds its net asset value by 17% while the book value continues to decrease.
  • The market considers Oxford's baby bonds safe because of their low YTM, but I would choose bonds from more stable BDCs.
  • OXSQ stock stands as one of my final BDC investment choices, even when selecting for dividend-focused portfolios.

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EschCollection

Thesis

A stock that approaches its lowest historical value while experiencing multiple years of decline indicates that fundamental problems exist.

The stock's 80% value decline since its Nasdaq listing combined with its high dividend yield makes its situation even

This article was written by

430 Followers
Mr. Mavroudis is a professional portfolio manager specializing in institutional and private portfolios. He focuses on risk management, which is accompanied by in-depth financial market analysis (fundamental, macro and technical) to control the risk undertaken by the portfolios. He invests in all financial instruments globally (stocks, bonds, fx, commodities), restructuring investment portfolios based on prevailing conditions and the needs of each client-investor. Mr. Mavroudis has successfully navigated all major crises of recent years, including the COVID-19 pandemic and the PSI. He writes daily articles for reputable financial media, appears as a guest commentator on television and online programs, and teaches in educational seminars. He has published three books on investments. He is the CEO of FAST FINANCE Investment Services (registered Greek company by the Hellenic Capital Market Commission). He holds an MSc in Financial and Banking Management (University of Piraeus), an LLM in Law (Athens Law School), and a BSc in Economics (Panteion University), where he graduated as valedictorian. He is a certified portfolio manager by the Hellenic Capital Market Commission, a certified analyst for financial instruments or issuers, a certified specialist in derivatives and securities market-making by the Athens Stock Exchange, and a certified derivatives and securities clearing expert by the Hellenic Capital Market Commission. He is also a licensed Class A accountant-tax consultant and member of the Economic Chamber of Greece. By writing on Seeking Alpha, will allow him to engage with a vibrant community of investors and market enthusiasts. His goal is to contribute meaningful perspectives while also learning from others, fostering a space of mutual growth and knowledge sharing.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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