Gladstone Investment (NASDAQ:GAIN – Get Free Report) and Oxford Square Capital (NASDAQ:OXSQ – Get Free Report) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, risk, valuation, earnings and profitability.
Valuation and Earnings
This table compares Gladstone Investment and Oxford Square Capital”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Gladstone Investment | $93.66 million | 5.88 | $65.32 million | $2.50 | 5.55 |
| Oxford Square Capital | $42.68 million | 3.37 | $5.88 million | ($0.04) | -44.00 |
Risk & Volatility
Gladstone Investment has a beta of 0.83, suggesting that its stock price is 17% less volatile than the S&P 500. Comparatively, Oxford Square Capital has a beta of 0.49, suggesting that its stock price is 51% less volatile than the S&P 500.
Profitability
This table compares Gladstone Investment and Oxford Square Capital’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Gladstone Investment | 94.99% | 7.12% | 3.34% |
| Oxford Square Capital | -6.39% | 14.80% | 7.88% |
Analyst Ratings
This is a breakdown of recent ratings and recommmendations for Gladstone Investment and Oxford Square Capital, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Gladstone Investment | 0 | 4 | 1 | 0 | 2.20 |
| Oxford Square Capital | 1 | 0 | 0 | 0 | 1.00 |
Dividends
Gladstone Investment pays an annual dividend of $0.96 per share and has a dividend yield of 6.9%. Oxford Square Capital pays an annual dividend of $0.42 per share and has a dividend yield of 23.9%. Gladstone Investment pays out 38.4% of its earnings in the form of a dividend. Oxford Square Capital pays out -1,050.0% 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.
Insider and Institutional Ownership
11.9% of Gladstone Investment shares are owned by institutional investors. Comparatively, 6.4% of Oxford Square Capital shares are owned by institutional investors. 2.4% of Gladstone Investment shares are owned by company insiders. Comparatively, 8.6% of Oxford Square Capital shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Summary
Gladstone Investment beats Oxford Square Capital on 10 of the 15 factors compared between the two stocks.
About Gladstone Investment
Gladstone Investment Corporation is business development company, specializes in lower middle market, mature stage, buyouts; refinancing existing debt; senior debt securities such as senior loans, senior term loans, lines of credit, and senior notes; senior subordinated debt securities such as senior subordinated loans and senior subordinated notes; junior subordinated debt securities such as subordinated notes and mezzanine loans; limited liability company interests, and warrants or options. The fund does not invest in start-ups. The fund seeks to invest in manufacturing, consumer products and business/consumer services sector. It seeks to invest in small and mid-sized companies based in the United States. The fund prefers to make debt investments between $5 million and $30 million and equity investments between $10 million and $40 million in companies. The fund seeks to invest in companies with revenue between $20 million and $100 million. The fund invests in companies with EBITDA from $3 million to $20 million. It seeks minority equity ownership and prefers to hold a board seat in its portfolio companies. It also prefers to take majority stake in its portfolio companies. The fund typically holds the investments for seven years and exits via sale or recapitalization, initial public offering, or sale to third party.
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.
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