Saratoga Investment Corp (NYSE:SAR) to Issue $0.25 Monthly Dividend

Key Points

• Saratoga Investment declared a $0.25-per-share monthly dividend, payable October 22 to shareholders of record on October 6. The annualized payout is $3.00 per share, representing a 17.3% yield.
• Dividend sustainability is a concern: the current payout ratio is 90.4%, while analysts expect next year’s earnings to cover only about two-thirds of the projected annual dividend, implying a 150% payout ratio.
• Saratoga Investment’s latest quarterly results fell short of expectations, with earnings of $0.47 per share versus the $0.54 consensus estimate. Its shares recently traded at $17.35, near the company’s 52-week low of $17.20.

Saratoga Investment Corp (NYSE:SAR - Get Free Report) announced a monthly dividend on Wednesday, September 9th. Investors of record on Tuesday, October 6th will be given a dividend of 0.25 per share by the financial services provider on Thursday, October 22nd. This represents a c) dividend on an annualized basis and a dividend yield of 17.3%. The ex-dividend date of this dividend is Tuesday, October 6th.

Saratoga Investment has raised its dividend by an average of 0.2%annually over the last three years. Saratoga Investment has a dividend payout ratio of 90.4% meaning its dividend is currently covered by earnings, but may not be in the future if the company's earnings fall. Analysts expect Saratoga Investment to earn $2.00 per share next year, which means the company may not be able to cover its $3.00 annual dividend with an expected future payout ratio of 150.0%.

Saratoga Investment Stock Performance

NYSE SAR traded down $0.10 on Wednesday, hitting $17.35. 185,143 shares of the company's stock traded hands, compared to its average volume of 134,058. The firm has a market capitalization of $278.99 million, a PE ratio of 17.35 and a beta of 0.54. Saratoga Investment has a 1-year low of $17.20 and a 1-year high of $25.15. The firm's 50-day moving average price is $19.16 and its two-hundred day moving average price is $21.30. The company has a current ratio of 0.09, a quick ratio of 0.09 and a debt-to-equity ratio of 0.18.

Saratoga Investment (NYSE:SAR - Get Free Report) last posted its earnings results on Tuesday, July 7th. The financial services provider reported $0.47 earnings per share (EPS) for the quarter, missing analysts' consensus estimates of $0.54 by ($0.07). The business had revenue of $30.78 million for the quarter, compared to analyst estimates of $31.38 million. Saratoga Investment had a net margin of 12.70% and a return on equity of 8.76%. As a group, analysts expect that Saratoga Investment will post 1.94 EPS for the current year.

Hedge Funds Weigh In On Saratoga Investment

Several large investors have recently modified their holdings of SAR. Cetera Investment Advisers increased its position in shares of Saratoga Investment by 2.2% during the 1st quarter. Cetera Investment Advisers now owns 22,301 shares of the financial services provider's stock worth $488,000 after purchasing an additional 476 shares during the last quarter. Royal Bank of Canada grew its position in Saratoga Investment by 3.2% in the 1st quarter. Royal Bank of Canada now owns 17,950 shares of the financial services provider's stock valued at $393,000 after acquiring an additional 557 shares in the last quarter. BNP Paribas Financial Markets purchased a new stake in Saratoga Investment during the third quarter worth about $25,000. Triumph Capital Management grew its stake in Saratoga Investment by 66.2% during the 2nd quarter. Triumph Capital Management now owns 2,950 shares of the financial services provider's stock worth $66,000 after purchasing an additional 1,175 shares in the last quarter. Finally, Osaic Holdings Inc. raised its position in Saratoga Investment by 24.0% in the 2nd quarter. Osaic Holdings Inc. now owns 6,256 shares of the financial services provider's stock valued at $155,000 after purchasing an additional 1,211 shares in the last quarter. Institutional investors and hedge funds own 19.09% of the company's stock.

Saratoga Investment Company Profile

Saratoga Investment Corp. is a closed-end, externally managed investment company that seeks to generate current income and total return through a diversified portfolio of private U.S. companies. Trading on the New York Stock Exchange under the ticker SAR, the firm primarily targets middle-market businesses across a broad range of industries, including industrials, healthcare, consumer products, financial services and technology. Its investment approach combines debt and equity instruments, providing flexible capital solutions such as first-lien and second-lien secured loans, mezzanine debt, preferred equity and common equity positions.

As an actively managed vehicle, Saratoga Investment works closely with portfolio companies’ management teams to support growth initiatives, operational improvements, and strategic transactions.

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