Runway Growth Finance Corp. (RWAY) vs Saratoga Investment Corp (SAR)

Runway Growth Finance Corp. and Saratoga Investment Corp are both Asset Management companies. Runway Growth Finance Corp. and Saratoga Investment Corp are of similar size ($282.1M and $278.7M). Saratoga Investment Corp trades at the lower P/E: 17.1× against 61.6×. Runway Growth Finance Corp. grew revenue faster over the last twelve months: −5.47% against −12.9%. Saratoga Investment Corp has the higher net margin (12.7% vs 5.82%) and the higher return on invested capital (5.52% vs 2.96%). Both pay a dividend; Runway Growth Finance Corp. yields more (13.4% vs 12.3%). Across the 21 metrics below, Saratoga Investment Corp leads on 12 and Runway Growth Finance Corp. on 9.

Valuation

Metric RWAY SAR Asset Management median
P/E 61.64 17.11 14.62
P/S 2.14 2.24 2.97
P/B 0.57 0.73 0.94
Price to free cash flow n/m n/m 8.93
EV/EBITDA 10.13 3.03 10.32
EV/Sales 7.27 2.31 5.72
Earnings yield 1.62% 5.84% 4.53%
Free cash flow yield (26.42%) (52.60%) 4.65%

Profitability

Metric RWAY SAR Asset Management median
Gross margin 100.00% 100.00% 100.00%
Operating margin 75.26% 68.26% 33.03%
Net margin 5.82% 12.70% 13.53%
Free cash flow margin (56.56%) (117.81%) 12.44%
Return on equity 1.55% 4.07% 4.83%
Return on assets 0.69% 1.31% 1.57%
Return on invested capital 2.96% 5.52% 3.04%

Growth

Metric RWAY SAR Asset Management median
Revenue growth (TTM) (5.47%) (12.86%) 6.97%
EPS growth (last fiscal year) (50.79%) 14.36% —
Revenue growth, 5-year CAGR 18.97% 8.36% 12.13%
Net income growth, 5-year CAGR (6.24%) (4.36%) 0.00%

Health

Metric RWAY SAR Asset Management median
Debt to equity 1.38 0.19 0.42
Current ratio 0.93 0.09 1.28
Net debt to EBITDA 4.42 0.50 1.06

Dividend

Metric RWAY SAR Asset Management median
Dividend yield 13.44% 12.27% 6.92%
Payout ratio 1.00 1.13 0.77

Size

Metric RWAY SAR Asset Management median
Market cap 282.05m 278.68m 721.34m

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