Saratoga Investment Delivers Fiscal Q2 Results; Earnings Shrink

Saratoga Investment Corp (SAR) posted upbeat Fiscal Q2 2022 results for the period ended August 31, 2021. The company had a record quarter of repayments as it continued to bring new platforms into the portfolio with investments in four new companies. SAR shares rose 1.73% to close at $29.44 on October 5.

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Saratoga is a U.S. company specializing in leveraged and management buyouts, acquisitions, and customized financing solutions.

Asset under management increased 31.1% year-over-year to $666.1 million as net asset value surged to $324.1 million from $298.2 last year. Additionally, the company delivered a net asset value per share of $28.97, a historic high compared to $28.70 per share in the first quarter and $26.68 per share for the second quarter of 2020.

Total investment income was up 33.1% year-over-year to $18.4 million. The increase is attributed to an investment base that has grown by 31.1% since last year. (See Saratoga Investment Corp stock charts on TipRanks)

However, earnings in the Fiscal second quarter shrunk to $0.71 a share compared to $1.95 delivered the same quarter last year. Return on equity increased to 14.4% for the 12 months ended August 31, 2021, compared to 14.3% for the same period last year.

Saratoga exited the quarter with solid credit quality, with 93% of loan investments rated in the highest category.

CEO Christian L. Oberbeck stated, “We remain confident in our experienced management team, high underwriting standards and ability to steadily grow portfolio size and maintain quality and investment performance over the long-term.”

In August, Maxim Group analyst Michael Diana reiterated a Buy rating on the stock with a $31 price target, implying 5.30% upside potential to current levels.

Consensus among analysts is a Strong Buy based on 4 Buys. The average Saratoga Investment price target of $30.25 implies 2.75% upside potential to current levels.