Maxim Group Reaffirms Buy Rating for Saratoga Investment (NYSE:SAR)

Maxim Group restated their buy rating on shares of Saratoga Investment (NYSE:SAR) in a research note released on Friday morning, reports. The brokerage currently has a $27.00 target price on the financial services provider’s stock.

“SAR reported F1Q20 adjusted/core NII (excluding incentive fee accrual related to unrealized capital gains) of $0.60 versus its F1Q20 dividend of $0.55, up from $0.54 in F4Q19. SAR has now raised its dividend for 19 consecutive quarters. Based on over- coverage and management optimism regarding the investment pipeline, we expect SAR to continue to raise its dividend by $0.01/share for each quarter through FY21 (which would produce a F4Q21 yield of 10.3% on current NAV). We are maintaining our price target at $27. With: 1) a relatively low-risk strategy of focusing on senior secured, floating-rate loans, 2) a strong credit quality record, and 3) top-tier performance metrics, SAR deserves to trade at a level similar to high-quality peers, in our view. Our price target equates to 1.12x NAV (versus 1.14x previously), which is inline with high-quality peers.”,” Maxim Group’s analyst commented.

A number of other research firms also recently weighed in on SAR. LADENBURG THALM/SH SH downgraded Saratoga Investment from a buy rating to a neutral rating and set a $24.00 price target for the company. in a research report on Friday, May 10th. They noted that the move was a valuation call. National Securities reaffirmed a neutral rating and set a $24.00 price target on shares of Saratoga Investment in a research report on Friday, May 17th. Compass Point downgraded Saratoga Investment from a buy rating to a neutral rating in a research report on Monday, April 15th. Finally, Zacks Investment Research raised General Moly from a sell rating to a hold rating in a report on Thursday, July 11th. Five equities research analysts have rated the stock with a hold rating and one has issued a buy rating to the stock. Saratoga Investment currently has an average rating of Hold and a consensus target price of $24.25.

NYSE:SAR opened at $24.76 on Friday. Saratoga Investment has a twelve month low of $18.60 and a twelve month high of $25.65. The business’s 50 day moving average price is $24.36. The firm has a market cap of $197.77 million, a P/E ratio of 9.41 and a beta of 0.64.

Saratoga Investment (NYSE:SAR) last released its quarterly earnings results on Wednesday, July 10th. The financial services provider reported $0.60 earnings per share for the quarter, topping analysts’ consensus estimates of $0.57 by $0.03. Saratoga Investment had a return on equity of 10.75% and a net margin of 44.66%. The firm had revenue of $12.75 million during the quarter, compared to the consensus estimate of $12.21 million. On average, analysts expect that Saratoga Investment will post 2.39 earnings per share for the current fiscal year.

The business also recently disclosed a quarterly dividend, which was paid on Thursday, June 27th. Stockholders of record on Thursday, June 13th were issued a $0.55 dividend. This represents a $2.20 annualized dividend and a dividend yield of 8.89%. The ex-dividend date of this dividend was Wednesday, June 12th. This is an increase from Saratoga Investment’s previous quarterly dividend of $0.54. Saratoga Investment’s dividend payout ratio is presently 83.65%.

Hedge funds and other institutional investors have recently added to or reduced their stakes in the company. North Star Investment Management Corp. acquired a new stake in shares of Saratoga Investment in the 1st quarter valued at approximately $25,000. Macquarie Group Ltd. raised its stake in Saratoga Investment by 68.8% in the 4th quarter. Macquarie Group Ltd. now owns 1,939 shares of the financial services provider’s stock valued at $39,000 after acquiring an additional 790 shares during the period. Advisors Asset Management Inc. bought a new stake in Saratoga Investment in the 1st quarter valued at $198,000. Wiley BROS. Aintree Capital LLC bought a new stake in Saratoga Investment in the 2nd quarter valued at $225,000. Finally, Private Portfolio Partners LLC bought a new stake in Saratoga Investment in the 1st quarter valued at $311,000. 16.66% of the stock is owned by institutional investors.

About Saratoga Investment

Saratoga Investment Corp. is a business development company specializing in leveraged and management buyouts, acquisition financings, growth financings, recapitalization, debt refinancing, and transitional financing transactions at the lower end of middle market companies. It structures its investments as debt and equity by investing through first and second lien loans, mezzanine debt, co-investments, select high yield bonds, senior secured bonds, unsecured bonds, and preferred and common equity.

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