Reviewing Oxford Square Capital (NASDAQ:OXSQ) & FS KKR Capital (NYSE:FSK)

Oxford Square Capital (NASDAQ:OXSQ) and FS KKR Capital (NYSE:FSK) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitability, risk, earnings, dividends, valuation, analyst recommendations and institutional ownership.

Risk & Volatility

Oxford Square Capital has a beta of 0.54, meaning that its share price is 46% less volatile than the S&P 500. Comparatively, FS KKR Capital has a beta of 0.84, meaning that its share price is 16% less volatile than the S&P 500.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Oxford Square Capital	$42.68 million	3.41	$5.88 million	($0.04)	-44.50
FS KKR Capital	$1.72 billion	N/A	$585.00 million	$0.97	13.38

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

Dividends

Oxford Square Capital pays an annual dividend of $0.42 per share and has a dividend yield of 23.6%. FS KKR Capital pays an annual dividend of $2.56 per share and has a dividend yield of 19.7%. Oxford Square Capital pays out -1,050.0% of its earnings in the form of a dividend. FS KKR Capital pays out 263.9% 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 is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Oxford Square Capital	-6.39%	14.80%	7.88%
FS KKR Capital	17.24%	5.63%	2.49%

Analyst Ratings

This is a summary of recent recommendations and price targets for Oxford Square Capital and FS KKR Capital, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Oxford Square Capital	1	0	0	0	1.00
FS KKR Capital	0	8	0	0	2.00

FS KKR Capital has a consensus target price of $17.50, suggesting a potential upside of 34.81%. Given FS KKR Capital’s stronger consensus rating and higher possible upside, analysts clearly believe FS KKR Capital is more favorable than Oxford Square Capital.

Institutional and Insider Ownership

6.4% of Oxford Square Capital shares are held by institutional investors. Comparatively, 36.3% of FS KKR Capital shares are held by institutional investors. 8.6% of Oxford Square Capital shares are held by insiders. Comparatively, 0.2% of FS KKR Capital shares are held 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

FS KKR Capital beats Oxford Square Capital on 9 of the 14 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 FS KKR Capital

FS KKR Capital Corp. is a business development company specializing in investments in debt securities. It provides customized credit solutions to private middle market U.S. companies. It invest primarily in the senior secured debt and, to a lesser extent, the subordinated debt of private middle market U.S. companies. It seeks to purchase interests in loans through secondary market transactions or directly from the target companies as primary market investments. It also seeks to invest in first lien senior secured loans, second lien secured loans and, to a lesser extent, subordinated loans, or mezzanine loans. In connection with the debt investments, the firm also receives equity interests such as warrants or options as additional consideration. It also seek to purchase minority interests in the form of common or preferred equity in our target companies, either in conjunction with one of the debt investments or through a co-investment with a financial sponsor. Additionally, on an opportunistic basis, the fund may also invest in corporate bonds and similar debt securities. The fund does not seek to invest in start-up companies, turnaround situations, or companies with speculative business plans. It seeks to invest in small and middle-market companies based in United States. The fund seeks to invest in firms with annual revenue between $10 million to $2.5 billion. It focus on providing customized one-stop credit solutions to private upper middle market companies with annual EBITDA of $50 million to $100 million at the time of investment. It seeks to exit from securities by selling them in a privately negotiated over- the- counter market. For any investments that are not able to be sold within the secondary market, the firm seeks to exit such investments through repayment, an initial public offering of equity securities, merger, sale or recapitalization.