Oxford Square Capital Corp (OXSQ)

I Scored 5 Top BDCs For Income. Here's The Order

BDC thesis - regulated, double-digit yields via the 90% payout rule, but inability to retain capital makes credit and dividend risk primary, so yield alone is a poor quality signal TOLL+M for BDCs - Book Quality (first-lien, non-accruals, NAV), Origination Moat (scale, sponsor sourcing), Funding Efficiency (internal mgmt, accretive issuance), Dividend Durability, Cycle Positioning Screen criteria - must cover the base dividend, avoid base cuts, run efficient funding, and earn sustainable double-digit ROE Top five survivors - MAIN, ARCC, HTGC, CSWC, FDUS; three are internally managed, all cover dividends and show double-digit ROE Macro and credit backdrop - fed funds 3.50%-3.75%, direct-lending coverage ~2.0x, PIK toward 8%, Fitch sees mid-single-digit defaults; higher-for-longer lifts coupons but strains borrowers Actionable guidance - avoid headline yields tied to cut histories (Oxford Square 30%, Runway 21%, Prospect 18%, BlackRock TCP 18%), favor the five screened BDCs and buy on NAV discounts from fear, not fundamentals