OFS Credit Company, Inc. (OCCI): BCG Matrix [Dec-2025 Updated]

You're looking for a clear-eyed assessment of OFS Credit Company, Inc. (OCCI) using the BCG framework, and honestly, it maps out a classic high-yield, high-risk structure. We've got Stars driving impressive 23.38% LTM revenue growth from CLO Equity, while Cash Cows like stable debt and preferred stock support that eye-popping dividend yield of approximately 28.51%. Still, the Dogs are gnawing at the value, evidenced by the NAV erosion down to the $5.41-$5.51 range and a hefty 14.34% expense ratio. The entire operation hangs as a Question Mark, with nearly 92% of capital tied up in that high-reward, high-risk CLO Equity space, barely covering payouts at an 86.79% ratio; read on to see what this means for your capital allocation strategy.

Background of OFS Credit Company, Inc. (OCCI)

You're looking at OFS Credit Company, Inc. (OCCI), which you should know is a publicly traded, closed-end management investment company registered under the Investment Company Act of 1940. Honestly, its core business is quite focused: it primarily invests in collateralized loan obligation (CLO) equity and debt securities. Its mission, as a business development company (BDC) in spirit, is to generate current income for shareholders first, with capital appreciation as the secondary goal. The firm is managed by OFS Capital Management, LLC, which has a seasoned team operating out of Chicago, New York, and Los Angeles.

The company also actively participates in the U.S. middle-market direct lending space, originating loans like secured, senior secured, and unitranche debt instruments to established businesses. This dual focus-CLOs and middle-market debt-is key to understanding its portfolio structure. For instance, looking at the preliminary data for the fiscal quarter ending October 31, 2025, management estimated the net asset value (NAV) per share to be in the range of $5.41 and $5.51. That's a tight window, which is helpful for near-term valuation checks.

To give you a sense of recent operational performance, OFS Credit Company, Inc. reported its Q3 2025 earnings on September 12, 2025, showing an Earnings Per Share (EPS) of $0.31 on quarterly revenue of $12.05 million. The total recorded annual revenue for the company stands at $32.55 million. Plus, as of that late 2025 period, the company had $115.9 million of term preferred stock outstanding, which is a significant part of its capital structure.

For income-focused investors, OCCI has been consistent with distributions; they declared monthly common stock cash distributions of $0.115 per share covering November and December 2025, and even January 2026. As of early December 2025, the stock, trading on NASDAQ under OCCI, was hovering around $4.53 to $4.99 per share, with a reported market capitalization of $125 million in mid-November 2025. That stock price, when compared to the estimated NAV, definitely suggests a discount you'll want to track.

OFS Credit Company, Inc. (OCCI) - BCG Matrix: Stars

You're looking at the engine driving top-line momentum for OFS Credit Company, Inc. (OCCI) right now. The high-growth aspect of the Stars quadrant is clearly visible in the trailing twelve-month revenue growth, which hit 23.38% as of October 31, 2025. That kind of top-line expansion suggests these business units-primarily the high-quality CLO Equity tranches-are leading their respective markets, even if they demand significant capital to maintain that pace.

These Stars are where the action is for potential capital appreciation, which is why investments in new CLOs are so critical. You need to keep feeding the machine to secure future cash flows. For instance, during the third fiscal quarter ended July 31, 2025, OFS Credit Company, Inc. deployed $27.6 million into the investment portfolio through net purchases. These new investments carried a weighted-average effective yield of 19.05% at that period end, which is the kind of return you expect from a market leader in a growing segment.

The floating-rate nature of the underlying loans in these CLO structures is a key structural benefit, offering a natural hedge when interest rates are moving up, which helps protect the cash flow stream supporting these Star investments. Still, the cash flow yield on the equity portion, which is the most volatile but highest-returning part, shows the current return profile.

Here's a quick look at how the yields on these high-potential assets have tracked across the recent quarters:

The 18.01% CLO equity cash flow yield recorded for the quarter ended January 31, 2025, signaled strong current returns from these leading positions. While the yield dipped slightly to 17.48% by July 31, 2025, that was attributed to tightening loan spreads driven by strong investor demand for CLOs and leveraged loans-a sign of market strength, not weakness in the asset class itself. You're definitely seeing high market returns here, but remember, these assets consume cash to grow.

To keep these Stars shining, OFS Credit Company, Inc. is actively raising capital to deploy. For example, in the quarter ending July 31, 2025, the company raised approximately $10.0 million through its At-the-Market common stock offering program. This capital is essential for funding the next wave of high-growth CLO investments.

Key operational and market context points for these Star assets include:

• LTM Revenue Growth: 23.38% (as of Oct 31, 2025).
• Q1 FY2025 CLO Equity Cash Flow Yield: 18.01%.
• Q3 FY2025 Portfolio Interest Income Yield: 14.38%.
• Q3 FY2025 Net Investment Deployment: $27.6 million.
• Market Capitalization (as of Oct 31, 2025): $125 million.
• Estimated NAV per Share (as of Oct 31, 2025): Range of $5.41 to $5.51.

If OFS Credit Company, Inc. can sustain this success as the high-growth market eventually matures, these units are positioned to transition into Cash Cows. Finance: draft 13-week cash view by Friday.

OFS Credit Company, Inc. (OCCI) - BCG Matrix: Cash Cows

Term Preferred Stock issuances provide OFS Credit Company, Inc. with stable, low-cost leverage. As of October 31, 2025, the total outstanding amount for this instrument was $115.9 million.

Investments in Collateralized Loan Obligation (CLO) Debt Securities, particularly senior tranches, are the core of the cash flow generation, providing predictable, stable interest income. The company recently executed a Master Repurchase Agreement involving up to $25 million in CLO securities, demonstrating active management of these assets.

The consistent monthly common stock distribution is supported by Net Investment Income (NII). Management's preliminary estimate for the fiscal quarter ended October 31, 2025, placed NII per share in the range of $0.20 and $0.24. This supported the declared monthly common stock distribution of $0.115 per share.

The common stock's high dividend yield attracts income-focused investors seeking stable cash payout. Data indicates a dividend yield of 29.65%.

The structure of the preferred stock distributions is set to maintain stability through early 2026.

• 6.125% Series C Term Preferred Stock distribution declared through January 31, 2026.
• 6.00% Series D Term Preferred Stock distribution declared through January 31, 2026.
• 8.00% Series G Term Preferred Stock distribution declared through January 31, 2026.

The following table summarizes key financial metrics related to the cash-generating structure as of late 2025.

The monthly common stock distributions for the period ending October 31, 2025, followed a specific schedule for stockholders of record.

• August 2025 Record Date: August 15, 2025, Payment Date: August 29, 2025, Distribution: $0.115.
• September 2025 Record Date: September 15, 2025, Payment Date: September 30, 2025, Distribution: $0.115.
• October 2025 Record Date: October 15, 2025, Payment Date: October 31, 2025, Distribution: $0.115.

The estimated Net Asset Value (NAV) per share at October 31, 2025, was in the range of $5.41 and $5.51. The common stock traded at $4.53 per share on November 17, 2025, with a market capitalization of $125 million.

OFS Credit Company, Inc. (OCCI) - BCG Matrix: Dogs

Dogs are units or products with a low market share and low growth rates. They frequently break even, neither earning nor consuming much cash. Dogs are generally considered cash traps because businesses have money tied up in them, even though they bring back almost nothing in return. These business units are prime candidates for divestiture.

For OFS Credit Company, Inc. (OCCI), the characteristics aligning with the Dogs quadrant stem from persistent valuation pressure and high operational costs relative to returns. You see this in the market pricing versus the underlying value.

The common stock trading at a significant discount to its estimated Net Asset Value (NAV) is a major indicator. As of October 2025, the estimated NAV range was between $5.41 and $5.51 per share. This market perception suggests low growth expectations for this segment of the business.

This segment is actively consuming capital through losses, rather than being cash neutral. Underperforming Collateralized Loan Obligation (CLO) investments are a key driver here, contributing to a $0.07 per share net realized loss for the fiscal quarter ended July 31, 2025 (Q3 2025). This is a direct cash drain, not a break-even situation.

The erosion of the underlying asset value confirms the low-growth, low-return profile. The NAV has shown a continuous decline, dropping from $7.00 in January 2025 to the $5.41-$5.51 range by October 2025. That is a significant drop in intrinsic value over nine months.

The operational drag is quantified by the expense structure. The expense ratio stands at a high 14.34%, which consistently pressures net returns, making it difficult for the unit to generate positive net earnings after costs. Expensive turn-around plans usually do not help.

Here are the key financial metrics pointing to the Dog classification:

• Common stock trading at a significant discount to estimated NAV of $5.41-$5.51 (Oct 2025).
• Net realized loss on investments of $0.07 per share in Q3 2025.
• NAV erosion from $7.00 (Jan 2025) to the $5.41-$5.51 range (Oct 2025).
• High expense ratio of 14.34% pressuring net returns.

To visualize the pressure on the book value, consider the trend:

The current market pricing, as of late 2025, reflects this weakness. For instance, the closing share price on October 31, 2025, was $4.90 against a $5.46 NAV, representing a -8.33% discount.

The core issue is the low market share within the overall OFS Credit Company, Inc. portfolio, coupled with low growth in the underlying assets, leading to the following financial reality:

• NAV Decline: The drop from $7.00 to the $5.41-$5.51 band shows capital destruction, not maintenance.
• Cost Burden: The 14.34% expense ratio means a large portion of gross income is consumed before reaching net returns.
• Realized Losses: The $0.07 per share loss in Q3 2025 demonstrates the unit is actively consuming cash reserves.

Finance: draft divestiture impact analysis for the segment represented by these assets by next Tuesday.

OFS Credit Company, Inc. (OCCI) - BCG Matrix: Question Marks

You're looking at the segment of OFS Credit Company, Inc. (OCCI) that demands the most attention right now-the Question Marks. These are the areas with high potential growth but where market share, or in this case, consistent, high-quality returns, hasn't been firmly established yet. For OFS Credit Company, Inc., this essentially maps to the CLO Equity portion of the portfolio, which the scenario suggests represents nearly 92% of total investments as of July 2025.

This strategy is squarely focused on the $1.1 trillion CLO market, which is definitely high growth, but it's a high-risk, high-reward game. You need active management to succeed here, especially since CLO Equity sits at the bottom of the capital structure, meaning it absorbs the first losses. Honestly, this is where the cash burn can happen if the underlying assets don't perform.

The current financial structure shows a tightrope walk. The high dividend payout ratio, stated as approximately 86.79%, suggests that Net Investment Income (NII) is just covering the distribution. What this means for you is that there's very little cash left over to reinvest organically into gaining that crucial market share within the CLO structures themselves. It limits the ability to self-fund growth.

Because of this tight coverage and the need to deploy capital into new, potentially high-growth CLO equity investments, continuous capital raises are a necessity. You saw this in action during the first quarter of 2025; OFS Credit Company, Inc. brought in $18.3 million in net proceeds from the At-the-Market (ATM) offering to fund these new investments and offset any immediate shortfalls.

The core challenge for these Question Marks is clear: they consume cash but haven't reliably generated the returns to sustain themselves without external funding. They need to quickly convert that high growth prospect into a Star position, or they risk becoming Dogs if the market share-the consistent cash flow from the CLO equity tranches-dries up.

Here's a snapshot of the financial context surrounding this high-growth/low-share segment:

The required actions for these Question Marks units are binary, really. You either invest heavily to capture that market growth, or you divest if the potential to become a Star isn't materializing quickly enough. The current financial data points to a need for external support to maintain the investment pace:

• CLO equity cash flow yield was 18.01% based on amortized cost for the quarter ended January 31, 2025.
• Net Asset Value (NAV) per common share was $7.00 as of January 31, 2025.
• Core NII for Q1 2025 was $7.5 million, down from $10.7 million in the prior quarter.
• The investment portfolio fair value was $237.5 million as of January 31, 2025.
• Monthly cash distribution declared was $0.115 per common share for the quarter ending April 30, 2025.

To manage this segment effectively, you need to see a rapid increase in the recurring waterfall payments from the CLO equity investments, which dropped to $10.9 million in Q1 2025 from $13.0 million in the prior quarter. That drop is the market share erosion you must fight.