Saratoga Investment reports Q4 EPS 94c, consensus 95c

Saratoga Investment announced financial results for its 2024 fiscal year and fourth quarter, with Net Investment Income per share up 53% from last year and up 16% over last year’s fourth quarter, and adjusted NII per share up 44% from last year and down 4% from last year’s fourth quarter. The substantial year-over-year increase in NII reflects growth in Assets under Management AUM , strong overall portfolio performance and margin improvement from year-over-year increased rates and spreads on Saratoga Investment’s largely floating rate assets, with costs of financing liabilities remaining largely fixed. Saratoga Investment’s annualized fourth quarter dividend of 73v per share and adjusted net investment income of 94c per share imply a 12.4% dividend yield and 16.0% earnings yield based on its recent stock price of $23.57 per share on May 3 . This substantial overearning of the dividend by 21c this quarter, or 84c annualized per share, supports the increased level of dividends, increases Net Asset Value or NAV), supports increased portfolio growth and provides a cushion against adverse events. In addition to the 13c dilution from increased shares this year, this quarter’s elevated earnings power and quality versus a year ago reflects a higher mix of recurring interest income, up 29%, and lower other income revenue items, down 44%, which includes structuring, advisory, and prepayment fees from a less robust recent M&A environment. In addition, excise taxes that are incurred once a year, were up $0.04 per share, or 71% over last year’s fourth quarter.