Contrasting Oxford Lane Capital (OXLC) and MFS Charter Income Trust (MCR)

Oxford Lane Capital (NASDAQ: OXLC) and MFS Charter Income Trust (NYSE:MCR) are both small-cap financials companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, valuation, earnings, profitability, analyst recommendations, dividends and institutional ownership.

Profitability

This table compares Oxford Lane Capital and MFS Charter Income Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Oxford Lane Capital 18.15% 5.38% 3.27%
MFS Charter Income Trust N/A N/A N/A

Valuation & Earnings

This table compares Oxford Lane Capital and MFS Charter Income Trust’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Oxford Lane Capital N/A N/A N/A $1.37 7.20
MFS Charter Income Trust N/A N/A N/A N/A N/A

Dividends

Oxford Lane Capital pays an annual dividend of $1.60 per share and has a dividend yield of 16.2%. MFS Charter Income Trust does not pay a dividend. Oxford Lane Capital pays out 116.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Risk and Volatility

Oxford Lane Capital has a beta of 1.01, suggesting that its stock price is 1% more volatile than the S&P 500. Comparatively, MFS Charter Income Trust has a beta of 0.43, suggesting that its stock price is 57% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Oxford Lane Capital and MFS Charter Income Trust, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Oxford Lane Capital 0 0 1 0 3.00
MFS Charter Income Trust 0 0 0 0 N/A

Oxford Lane Capital presently has a consensus target price of $11.00, indicating a potential upside of 11.45%. Given Oxford Lane Capital’s higher possible upside, analysts clearly believe Oxford Lane Capital is more favorable than MFS Charter Income Trust.

Summary

Oxford Lane Capital beats MFS Charter Income Trust on 7 of the 8 factors compared between the two stocks.

Oxford Lane Capital Company Profile

Oxford Lane Capital Corp. is a non-diversified closed-end management investment company. The Fund’s investment objective is to maximize its portfolio’s risk adjusted total return and seeks to achieve its investment objective by investing in structured finance investments, specifically collateralized loan obligation (CLO) vehicles, which primarily own senior corporate debt securities. The Fund holds debt investments in over three different CLO structures and equity investments in approximately 30 different CLO structures. Its investment strategy also includes investing in warehouse facilities, which are financing structures intended to aggregate loans that may be used to form the basis of a CLO vehicle. The Fund may also invest, on an opportunistic basis, in corporate debt securities on a direct basis and a range of other corporate credits. Oxford Lane Management, LLC (OXLC Management) is the investment advisor of the Fund.

MFS Charter Income Trust Company Profile

MFS Charter Income Trust (Fund) is a diversified closed-end management investment company. The Fund’s investment objective is to seek high current income, but may also consider capital appreciation. The Fund normally invests in debt instruments. The Fund also invests in corporate bonds of the United States and/or foreign issuers, the United States Government securities, foreign government securities, mortgage-backed and other asset-backed securities and/or debt instruments of issuers located in emerging market countries. The Fund’s portfolio comprises bonds, floating rate loans, equities, cash and cash equivalent and other. It invests in a range of Fixed income sectors, such as high yield corporates non-united states government bonds, investment grade corporates, emerging markets bonds, commercial mortgage-backed securities, asset-backed securities and collateralized debt obligations. Massachusetts Financial Services Company is the Fund’s investment advisor.

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