Maxim Group Reiterates a Buy Rating on Saratoga Investment Corp (SAR)

By Ryan Adsit

Maxim Group analyst Michael Diana reiterated a Buy rating on Saratoga Investment Corp (SARResearch Report) yesterday and set a price target of $27. The company’s shares opened today at $24.58, close to its 52-week high of $25.65.

Diana said:

“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.”

According to TipRanks.com, Diana is a 5-star analyst with an average return of 7.1% and a 59.1% success rate. Diana covers the Financial sector, focusing on stocks such as First Savings Financial Group, Manhattan Bridge Capital Inc, and Arlington Asset Investment.

The word on The Street in general, suggests a Moderate Buy analyst consensus rating for Saratoga Investment Corp with a $25.67 average price target, implying a 4.4% upside from current levels. In a report released today, B.Riley FBR also reiterated a Buy rating on the stock with a $26 price target.

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The company has a one-year high of $25.65 and a one-year low of $18.60. Currently, Saratoga Investment Corp has an average volume of 43.89K.

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Saratoga Investment Corp. is a specialty finance company, which engages in the provision of financing solutions. Its portfolio includes investments in leveraged loans issued by middle market companies. The company was founded on March 21, 2007 and is headquartered in New York, NY.