Saratoga Investment (NYSE:SAR) and U.S. Global Investors (NASDAQ:GROW) are both small-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, institutional ownership, dividends, earnings, profitability and risk.
Volatility and Risk
Saratoga Investment has a beta of 0.36, indicating that its share price is 64% less volatile than the S&P 500. Comparatively, U.S. Global Investors has a beta of 0.79, indicating that its share price is 21% less volatile than the S&P 500.
This table compares Saratoga Investment and U.S. Global Investors’ net margins, return on equity and return on assets.
||Return on Equity
||Return on Assets
|U.S. Global Investors
Earnings and Valuation
This table compares Saratoga Investment and U.S. Global Investors’ revenue, earnings per share and valuation.
||Earnings Per Share
|U.S. Global Investors
Saratoga Investment has higher revenue and earnings than U.S. Global Investors.
This is a breakdown of recent recommendations for Saratoga Investment and U.S. Global Investors, as provided by MarketBeat.com.
||Strong Buy Ratings
|U.S. Global Investors
Saratoga Investment presently has a consensus price target of $23.75, suggesting a potential upside of 3.98%. Given Saratoga Investment’s higher probable upside, equities research analysts clearly believe Saratoga Investment is more favorable than U.S. Global Investors.
Saratoga Investment pays an annual dividend of $2.08 per share and has a dividend yield of 9.1%. U.S. Global Investors pays an annual dividend of $0.03 per share and has a dividend yield of 2.6%. Saratoga Investment pays out 91.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Saratoga Investment has increased its dividend for 2 consecutive years. Saratoga Investment is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Insider and Institutional Ownership
16.6% of Saratoga Investment shares are owned by institutional investors. Comparatively, 23.3% of U.S. Global Investors shares are owned by institutional investors. 24.8% of Saratoga Investment shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Saratoga Investment beats U.S. Global Investors on 11 of the 14 factors compared between the two stocks.
About Saratoga Investment
Saratoga Investment Corp. is a business development company specializing in leveraged and management buyouts, acquisition financings, growth financings, recapitalization, debt refinancing, and transitional financing transactions at the lower end of middle market companies. It structures its investments as debt and equity by investing through first and second lien loans, mezzanine debt, co-investments, select high yield bonds, senior secured bonds, unsecured bonds, and preferred and common equity. It seeks to invest in the United States. The firm primarily invests $5 million to $20 million in companies having EBITDA of $2 million or greater and revenues of $8 million to $150 million. It invests through direct lending as well as participation in loan syndicates. The firm was formerly known as GSC Investment Corp. Saratoga Investment Corp. is based in New York, New York with an additional office in Florham Park, New Jersey.
About U.S. Global Investors
U.S. Global Investors, Inc. is a publicly owned investment manager. The firm primarily provides its services to investment companies. It also provides its services to pooled investment vehicles. The firm manages equity and fixed income mutual funds for its clients. It also manages hedge funds. The firm also manages exchange traded funds. It invests in the public equity and fixed income markets across the globe. It invests in G.A.R.P. and value stocks to make its equity investments. The firm employs a fundamental and quantitative analysis with top-down and bottom-up stock picking approach to make its investments. U.S. Global Investors, Inc. was founded in 1968 and is based in San Antonio, Texas.
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