Financial Comparison: OFS Capital (OFS) vs. TICC Capital (TICC)

OFS Capital (NASDAQ: OFS) and TICC Capital (NASDAQ:TICC) are both small-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, risk, analyst recommendations, dividends, earnings, institutional ownership and valuation.

Dividends

OFS Capital pays an annual dividend of $1.36 per share and has a dividend yield of 11.0%. TICC Capital pays an annual dividend of $0.80 per share and has a dividend yield of 12.7%. OFS Capital pays out 147.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. TICC Capital pays out 68.4% of its earnings in the form of a dividend. TICC Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares OFS Capital and TICC Capital’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
OFS Capital 25.74% 9.43% 4.79%
TICC Capital 94.98% 7.64% 4.95%

Institutional & Insider Ownership

28.7% of OFS Capital shares are held by institutional investors. Comparatively, 17.5% of TICC Capital shares are held by institutional investors. 0.0% of OFS Capital shares are held by company insiders. Comparatively, 5.9% of TICC Capital shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Risk and Volatility

OFS Capital has a beta of 0.47, meaning that its share price is 53% less volatile than the S&P 500. Comparatively, TICC Capital has a beta of 0.66, meaning that its share price is 34% less volatile than the S&P 500.

Earnings & Valuation

This table compares OFS Capital and TICC Capital’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
OFS Capital $31.09 million 5.29 $13.82 million $0.92 13.39
TICC Capital $69.28 million 4.69 $110.36 million $1.17 5.39

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

Analyst Ratings

This is a breakdown of recent ratings for OFS Capital and TICC Capital, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
OFS Capital 0 1 3 0 2.75
TICC Capital 2 1 1 0 1.75

OFS Capital currently has a consensus target price of $14.67, indicating a potential upside of 19.05%. TICC Capital has a consensus target price of $5.50, indicating a potential downside of 12.84%. Given OFS Capital’s stronger consensus rating and higher possible upside, research analysts clearly believe OFS Capital is more favorable than TICC Capital.

Summary

TICC Capital beats OFS Capital on 10 of the 16 factors compared between the two stocks.

About OFS Capital

OFS Capital Corporation (OFS Capital) is an externally managed, closed-end, non-diversified management investment company. The Company’s investment objective is to provide its shareholders with both current income and capital appreciation primarily through debt investments and equity investments. It focuses primarily on middle-market companies in the United States, including senior secured loans, including first-lien, second-lien and unitranche loans, as well as subordinated loans, and warrants and other minority equity securities. The Company may make investments directly or through OFS SBIC I, LP (SBIC I LP), its investment company subsidiary. It focuses on investments in loans, in which OFS Advisor’s investment professionals have expertise, including investments in first-lien, unitranche, second-lien, and mezzanine loans and, to a lesser extent, on warrants and other equity securities. The Company’s investment activities are managed by OFS Capital Management, LLC (OFS Advisor).

About TICC Capital

TICC Capital Corp. is a closed-end, non-diversified management investment company. The Company’s investment objective is to maximize its portfolio’s total return. The Company primarily focuses on seeking current income by investing primarily in corporate debt securities. The Company’s debt investments may include syndicated loans and bilateral loans. The Company holds interests in structured finance investments, including collateralized loan obligation (CLO) investment vehicles that own debt securities. CLO investments may also include warehouse facilities, which are financing structures intended to aggregate loans that may be used to form the basis of a CLO vehicle. The Company may also invest in publicly traded debt and/or equity securities. Its portfolio includes its investments in various industries, such as structured finance, telecommunication services, business services, printing and publishing, and financial intermediaries. TICC Management, LLC is its investment advisor.

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