OFS (OFS Capital Corporation) Income Falls Further Below Its $0.17 Distribution
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OFS Capital reported weaker third-quarter income on October 29, 2026, while maintaining its quarterly distribution at $0.17 per share. The payment is unchanged, but the earnings behind it have weakened again.
Net investment income, the amount left after borrowing costs and other expenses, fell to $0.05 per share from $0.08 in the previous quarter. Both quarters fell short of the $0.17 distribution. Lower expenses helped, although they could not offset the decline in investment income.
Meanwhile, net asset value, or assets after liabilities, declined from $8.41 to $7.38 per share. Loan problems add to the pressure: investments on which interest was no longer being accrued represented 9.3% of the portfolio’s fair value, compared with 7.2% at June 30.
OFS also received $52.3 million from a transaction involving its Pfanstiehl investment after quarter end, although the company disclosed litigation relating to that transaction. Cash proceeds should not be confused with recurring earnings.
We see a distribution that remains poorly supported by current investment income. The useful test now is whether the remaining investments can rebuild income after costs while troubled loans are resolved. An unchanged payment is welcome cash, but it is not evidence that earning power has recovered.
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This article is general information, not personalized investment advice. Fly High Investing may hold securities discussed in this article.