HRZN - Saratoga Investment (Down Big): 40+ Big-Yield BDCs Compared
2024-01-31 14:51:24 ET
Summary
- Saratoga Investment Corp is a small-cap business development company with a big 12.4% dividend yield and the shares just sold off hard (down ~10% year-to-date) now trading at a discounted 0.89x book value.
- Saratoga's 2.2x debt/equity is not as precarious as it may seem (thanks to significant loans backed by the SBIC), but it still could become problematic as non-transparent depreciation/write-downs continue.
- After comparing Saratoga to 40+ big-yield BDCs, we review the business, dividend, valuation, risks, and conclude with how it ranks among the top ideas in our portfolio.
Saratoga Investment Corp ( SAR ) is a small-cap business development company ($300 million market cap) with a big yield (12.4%) and some big risks. The company’s high leverage isn’t as bad as it seems (thanks to SBIC loans), but it could still become a problem considering continued depreciation/write-downs on a few of its larger investments. After comparing Saratoga to 40+ other big-yield BDCs, we review its business, valuation, dividend and risks. We conclude with our strong opinion on where Saratoga may belong among the top ideas in our Investing Group Portfolio....
Saratoga Investment (Down Big): 40+ Big-Yield BDCs Compared