Oxford Square Capital Corp Dossier - Source-backed chat

Oxford Square Capital Corp

OXSQNASDAQ

SectorFinancials

IndustryAsset Management & Custody Banks

Beta (adjusted)0.58

Intrinsic Value

Insufficient data for a value estimateNot enough reliable inputs to publish a fair value for this company yet.

Market Price $1.29Price as of 1 Oct 2026

Data confidenceNot applicable

Market Cap $138.9M

Enterprise Value $259.6M

Shares Outstanding 98.6M diluted

Next Earnings Date3 Nov 2026

Last ex-dividend17 Aug 2026

All prices and values are periodic snapshots, not live quotes. Source dates are shown for reference.

Thesis

Street consensus, scenarios, merits, risks, and invalidation triggers

AI-assisted

Thesis Summary

Oxford Square Capital Corp. (OXSQ) faces severe structural headwinds characterized by persistent Net Asset Value (NAV) erosion and a substantial dividend coverage shortfall. In Q1 2026, the company's NAV per share plummeted by 21.9% quarter-over-quarter to $1.32, driven by heavy realized losses of $30.7 million. Furthermore, its quarterly Net Investment Income (NII) of $0.05 per share covered only 47.6% of its $0.105 distribution, indicating that the high headline dividend yield is unsustainable and effectively functions as a return of capital. With leverage rising and the CLO equity portfolio under valuation pressure, the stock is highly vulnerable to further downside.

This section is the 12-month view: analyst targets and the probability-weighted scenarios built from them. The intrinsic value at the top of this page answers a different question: what the business is worth today.

Street view · analyst 12-month targets1 analysts · as of 18 Aug 2026

Low · most bearish analyst$1.75

Mean target$1.75

High · most bullish analyst$1.75

Our research · scenarios, merits, risks, and invalidation triggersResearch as of 19 Jun 2026

Scenarios · 12-month scenario targetsAnchored at research date

Bear CaseDownside scenario

Underlying corporate defaults rise significantly, causing severe write-downs in both the senior secured loan and CLO equity portfolios. The board is forced to implement a major distribution cut, triggering a massive sell-off as yield-focused retail investors exit.

Base CaseCentral scenario

The company continues to pay distributions that exceed its net investment income, leading to ongoing NAV decay. CLO equity yields remain compressed due to credit market volatility and underlying loan defaults, keeping NII depressed. The stock trades down to reflect the lower NAV.

Bull CaseUpside scenario

Oxford Square Capital Corp. (OXSQ) offers a highly attractive, double-digit annualized dividend yield (historically exceeding 18% to 20%) that appeals strongly to income-focused investors. The bull case rests on the potential recovery of its volatile collateralized loan obligation (CLO) equity marks, which are highly sensitive to market pricing but can rebound in a benign credit environment. Additionally, the fund maintains a defensive profile with low stock price volatility (beta of 0.58) and targets a specialized, high-yielding niche in technology-sector corporate loans.

Scenarios are anchored to street consensus at the research date, with our probabilities and rationale.

Key Investment Merits

High nominal dividend yield attractive to short-term income-focused investors.
Strategic tilt toward senior secured debt (representing approximately 58.5% of the portfolio at fair value) provides some credit protection relative to junior debt.

Key Investment Risks

Severe dividend coverage shortfall with NII covering less than half of the current distribution payout.
Significant exposure to highly volatile CLO equity tranches which are prone to rapid markdowns.
Rising leverage with the debt-to-equity ratio climbing to 1.26x as of Q1 2026.
Persistent NAV erosion, which has declined for five consecutive quarters.

Thesis Invalidation Triggers

A formal announcement of a distribution cut to align payouts with actual net investment income.
A material turnaround in CLO equity cash distribution yields.
An unexpected stabilization or recovery of NAV per share over consecutive quarters.

All scenarios are estimates and subject to change. Past performance is not indicative of future results.

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Explore this dossier

ValuationIntrinsic value, the six-method breakdown, peer medians, and your assumptions sandbox.Financial SnapshotRevenue, profitability, returns, balance sheet, dividends, and the filing-level detail.Qualitative AnalysisBusiness overview, strategic initiatives, and mergers, acquisitions & partnerships.Outlook & Key DatesForward estimates, reporting calendar, and the monitoring framework.