Can OFS Credit’s Sky-High 29% Dividend Offset Steep Share Price Decline?

OFS Credit Company Inc. finds itself at a critical juncture as its shares hover near annual lows while maintaining one of the market’s most substantial dividend yields. The financial firm’s stock currently trades at $4.59, approaching its 52-week low of $4.55, following a persistent six-month downtrend that has erased over 22% of its value.

Strategic Agreement with Investment Bank

In a recent strategic development, OFS Credit has established a Master Repurchase Agreement with Nomura Securities, creating a framework for repo transactions involving CLO securities worth up to $25 million. This arrangement enables Nomura to purchase CLO instruments from OFS Credit at predetermined prices, with the company obligated to repurchase them later at an agreed-upon premium. Market observers note that no transactions have yet been executed under this new agreement.

Dividend Strategy Amid Market Pressure

Despite the challenging market conditions, OFS Credit continues to emphasize shareholder returns through consistent distributions. The company has declared monthly cash dividends of $0.115 per share for November 2025, December 2025, and January 2026. The November distribution will be payable on November 28 to shareholders of record as of November 17.

Should investors sell immediately? Or is it worth buying OFS Credit?

Key financial metrics present a complex picture:
* Dividend yield: 29.42%
* Revenue growth (12-month): 23.38%
* Current ratio: 2.24
* Q3 2025 net investment income: $6.1 million ($0.22 per share)

With a market capitalization of $127 million, investors are questioning whether the extraordinary 29.42% dividend yield can provide sufficient support for the declining share price. The substantial monthly payments may appeal to income-focused investors, but the persistent downward trend in valuation raises concerns about the sustainability of this strategy as the company navigates current market headwinds.