Oxford Square Capital Faces Dividend Sustainability Concerns

Recent quarterly results from Oxford Square Capital reveal a company grappling with conflicting financial trends. The CLO-focused investment firm reported strengthening revenue generation alongside concerning declines in asset value, creating uncertainty around its ability to maintain current dividend distributions.

The most pressing issue for income-focused investors is the growing disparity between Oxford Square Capital’s dividend payments and its earnings. The company’s quarterly distribution of $0.105 per share now substantially exceeds its net investment income of $0.07 per share. This has driven the coverage ratio down to just 67%, a significant drop from 95% in the previous year. The widening gap raises legitimate questions about whether management will need to reduce the attractive payout in Read more...