Oxford Square Capital (NASDAQ:OXSQ – Get Free Report) and Walker & Dunlop (NYSE:WD – Get Free Report) are both small-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, profitability, dividends, analyst recommendations, risk, earnings and institutional ownership.
Profitability
This table compares Oxford Square Capital and Walker & Dunlop’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Oxford Square Capital | -93.65% | 14.41% | 6.81% |
| Walker & Dunlop | 2.94% | 7.25% | 2.31% |
Volatility & Risk
Oxford Square Capital has a beta of 0.33, indicating that its stock price is 67% less volatile than the S&P 500. Comparatively, Walker & Dunlop has a beta of 1.52, indicating that its stock price is 52% more volatile than the S&P 500.
Analyst Ratings
This is a breakdown of current ratings for Oxford Square Capital and Walker & Dunlop, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Oxford Square Capital | 1 | 0 | 0 | 0 | 1.00 |
| Walker & Dunlop | 1 | 0 | 5 | 0 | 2.67 |
Walker & Dunlop has a consensus price target of $59.75, indicating a potential upside of 80.55%. Given Walker & Dunlop’s stronger consensus rating and higher probable upside, analysts plainly believe Walker & Dunlop is more favorable than Oxford Square Capital.
Earnings and Valuation
This table compares Oxford Square Capital and Walker & Dunlop”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Oxford Square Capital | -$32.67 million | -4.30 | -$18.73 million | ($0.45) | -2.90 |
| Walker & Dunlop | $1.23 billion | 0.92 | $57.08 million | $1.12 | 29.55 |
Walker & Dunlop has higher revenue and earnings than Oxford Square Capital. Oxford Square Capital is trading at a lower price-to-earnings ratio than Walker & Dunlop, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
6.4% of Oxford Square Capital shares are owned by institutional investors. Comparatively, 81.0% of Walker & Dunlop shares are owned by institutional investors. 6.5% of Oxford Square Capital shares are owned by insiders. Comparatively, 4.0% of Walker & Dunlop shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Dividends
Oxford Square Capital pays an annual dividend of $0.42 per share and has a dividend yield of 32.2%. Walker & Dunlop pays an annual dividend of $2.72 per share and has a dividend yield of 8.2%. Oxford Square Capital pays out -93.3% of its earnings in the form of a dividend. Walker & Dunlop pays out 242.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Walker & Dunlop has increased its dividend for 7 consecutive years. Oxford Square Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.
Summary
Walker & Dunlop beats Oxford Square Capital on 12 of the 17 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 Walker & Dunlop
Walker & Dunlop, Inc. is a holding company, which engages in the provision of commercial real estate and finance services. It operates through the following segments: Capital Markets, Servicing and Asset Management, and Corporate. The Capital Markets segment offers a comprehensive range of commercial real estate finance products to customers. The Servicing and Asset Management segment includes servicing and asset-managing and managing third-party capital investments. The Corporate segment consists primarily of the company’s treasury operations and other corporate-level activities. The company was founded by Oliver Walker and Laird Dunlop in 1937 and is headquartered in Bethesda, MD.
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