Oxford Lane Capital stocks dividends

Oxford Lane Capital Group

And that’s when Oxford lane Capital group stock comes in. We’ll analyze the stock and its value against its main competitor. In the end, it’s up to you to decide if its a good investment or not.

It’s not easy being an investor in this current day and age. The stock market is already a difficult concept for beginners at first; getting monthly dividends is also another issue that most stock options aren’t able to provide.

About Oxford Lane Capital Group

Oxford Lane Capital is a management investment company that’s publically traded in NASDAQ.  The company seeks to achieve their investment objective of maximizing their risk-adjusted return by investing in equity and debt tranches of CLO (collateralized loan obligations) vehicles.

The CLO investments might also include warehouse facilities. This is where their financing structures are used to aggregate loans that might be used to form the basis of a CLO vehicle.

Investment Portfolio

However, that’s just the surface of Oxford lane Capital group stock. CLOs account for 100% of their investment stock. 97% of it is in CLO equity and 3% in CLO debt.

What are CLOs? CLOs are debts that are grouped together by loan originators (leveraged lenders, banks, and others) and is sold to investors as CLOs.

While there are some restrictions on CLO production, the due diligence is harder on these assets. A bank lender or a business development corporation (BDC) can look at a debtor’s creditworthiness when planning on lending money. But the due diligence on a grouped collections of loans is significantly harder. (the increased difficulty is a great plot point in both the Big Short movie and book).

The chart below displays the valuations and earnings of Oxford lane Capital group stock:

Gross RevenuePrice/Sales RatioNet IncomeEarnings Per Share    Earnings/Price Ratio
Oxford Lane Capital Corp82.50M4.4848.27M1.3318.98
Great Elm Capital Group Inc.10.64M7.929.81M-0.400.00

Based on this graph we can see that Oxford lane Capital stocks is doing better than its competition. With OXLC, shareholders have a higher earning per share, making it the better option if you’re trying to short CLO stocks.

It’s clear to tell which company provides more value. Oxford lane Capital group stock has a higher gross revenue by 71.86 million. Additionally, their net income is over 38.46 million higher than Great Elm Capital Group Inc.

Let’s take a look their profitability. Based on the chart you can see that Oxford lane Capital group stock is potentially the more lucrative option:

Net MarginsReturn on EquityReturn on Assets
Oxford Lane Capital Corp.58.51%0%0%
Great Elm Capital Group Inc-92.20%-15.4%-7.5%

Investment Strategy

Put simply; Oxford Lane Capital Group investment strategy involves shorting CLO stocks. Investing in Oxford lane Capital group stock isn’t the same as owning bank stock. On one hand, its similar to bank equity exposure to credit risk by obtaining OXLC.

But, OXLC has a 2/20 fee structure that’s more of an incentive structure than the structure than the one that’s expected from your community bank. Based on OXLC’s semi-annual report, it charges up to a 20% incentive fee, 2% of base management, and a 7% hurdle rate (up to a provision).

Dividend Rates

Previously, OXLC would pay out their stock dividends at a quarterly distribution schedule. All of that changed last year. In December 2017, Oxford lane Capital group stock decided to pay dividends in a monthly basis in early 2018. In other words, one of its core investment strategies is to pay their shareholders in monthly dividends.

This was certainly a welcoming move that attracted more investors. Most of us have bills that need to be paid off monthly, so its great to have a monthly dividend income to help match with our expenses.

As of now,  the company now offers monthly dividends at $0.135 a share, which is paid by the end of the month. Due to its fast dividend payouts, we can see that their investment strategy is to provide value to their shareholders.

In fact, trading at $10.21 a share, Oxford Lane Capital Group has a 15% annual dividend yield.

Because of this, it has one of the highest yields within the stock market.

Conclusion

Based on their monthly dividends, profit margins, and competitor analysis, we believe that the Oxford Lane Capital stocks has the potential to do well in 2019. Like any investment option, it’s best that you conduct your own research before owning a share. If there are any questions you have about Oxford lane Capital stocks, please share them in the comment section.

Sources:

  1. https://hinewulm.com/2019/01/21/great-elm-capital-group-inc-gec-and-oxford-lane-capital-corp-nasdaqoxlco-contrasting-side-by-side/
  2. https://seekingalpha.com/article/3972286-closer-look-oxford-lane-hefty-payout?page=2
  3. https://www.incomeinvestors.com/oxlc-stock-monthly-dividend-stock-pays-investors-15/43307/

Image Sources:

  1. http://oxford-capital.com/
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