Saratoga Investment Corp (NYSE: SAR) and iShares S&P NA Tec. Semi. Idx. Fd.(ETF) (NASDAQ:SOXX) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, profitabiliy, analyst recommendations, risk, valuation, institutional ownership and earnings.

Profitability

This table compares Saratoga Investment Corp and iShares S&P NA Tec. Semi. Idx. Fd.(ETF)’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Saratoga Investment Corp 26.84% 8.03% 3.19%
iShares S&P NA Tec. Semi. Idx. Fd.(ETF) 537.77% 16.94% 16.29%

Institutional & Insider Ownership

16.2% of Saratoga Investment Corp shares are held by institutional investors. 32.0% of Saratoga Investment Corp shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Saratoga Investment Corp and iShares S&P NA Tec. Semi. Idx. Fd.(ETF)’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Saratoga Investment Corp $33.96 million 3.75 $9.43 million $1.58 13.50
iShares S&P NA Tec. Semi. Idx. Fd.(ETF) N/A N/A N/A N/A N/A

Saratoga Investment Corp has higher revenue and earnings than iShares S&P NA Tec. Semi. Idx. Fd.(ETF).

Analyst Recommendations

This is a breakdown of recent recommendations for Saratoga Investment Corp and iShares S&P NA Tec. Semi. Idx. Fd.(ETF), as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Saratoga Investment Corp 0 0 0 0 N/A
iShares S&P NA Tec. Semi. Idx. Fd.(ETF) 0 5 1 0 2.17

iShares S&P NA Tec. Semi. Idx. Fd.(ETF) has a consensus price target of $170.00, suggesting a potential upside of 14.93%. Given iShares S&P NA Tec. Semi. Idx. Fd.(ETF)’s higher possible upside, analysts clearly believe iShares S&P NA Tec. Semi. Idx. Fd.(ETF) is more favorable than Saratoga Investment Corp.

Dividends

Saratoga Investment Corp pays an annual dividend of $1.88 per share and has a dividend yield of 8.8%. iShares S&P NA Tec. Semi. Idx. Fd.(ETF) does not pay a dividend. Saratoga Investment Corp pays out 119.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

iShares S&P NA Tec. Semi. Idx. Fd.(ETF) beats Saratoga Investment Corp on 6 of the 10 factors compared between the two stocks.

Saratoga Investment Corp Company Profile

Saratoga Investment Corp. is a specialty finance company. The Company is an externally managed, closed-end, non-diversified management investment company. The Company invests primarily in leveraged loans and mezzanine debt issued by private middle-market companies in the United States. Its investment objective is to generate current income and, to a lesser extent, capital appreciation from its investments. It purchases mezzanine debt and makes equity investments in middle market companies. It may invest in other investments, such as investments in distressed debt, including securities of companies in bankruptcy, foreign debt, private equity, securities of public companies that are not thinly traded and structured finance vehicles, such as collateralized loan obligation funds. Its leveraged loan portfolio consists primarily of first lien and second lien term loans. The Company’s investment activities are externally managed and advised by Saratoga Investment Advisors, LLC.

iShares S&P NA Tec. Semi. Idx. Fd.(ETF) Company Profile

iShares PHLX Semiconductor ETF, formerly iShares PHLX SOX Semiconductor Sector Index Fund (the Fund), is an exchange-traded fund. The Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the United States-listed semiconductor stocks as represented by the PHLX Semiconductor Sector Index (the Index). The Index is an equity benchmark for the United States-listed semiconductor stocks. The Index includes companies primarily involved in the design, distribution, manufacture and sale of semiconductors. The Fund generally invests at least 90% of its assets in securities of the Index and in depositary receipts representing securities of the Index. BlackRock Fund Advisors (BFA) serves as the investment adviser to the Fund.

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