Saratoga Investment Corp (SAR) vs Stellus Capital Investment Corporation (SCM)

Saratoga Investment Corp and Stellus Capital Investment Corporation are both Asset Management companies. Saratoga Investment Corp is the larger, with a market value of $236.8M against $205.6M — 1.2× the size. Saratoga Investment Corp has negative trailing earnings, so its P/E is not meaningful; Stellus Capital Investment Corporation trades at 6.9×. Saratoga Investment Corp grew revenue faster over the last twelve months: −4.15% against −5.52%. Stellus Capital Investment Corporation has the higher net margin (30.7% vs −3.35%) and the lower return on invested capital (2.12% vs 6.21%). Both pay a dividend; Saratoga Investment Corp yields more (22.9% vs 18.8%). Across the 18 metrics below, Saratoga Investment Corp leads on 10 and Stellus Capital Investment Corporation on 8.

Valuation

Metric SAR SCM Asset Management median
P/E n/m 6.92 13.99
P/S 1.98 2.10 2.76
P/B 0.70 0.56 0.85
Price to free cash flow n/m 4.53 8.32
EV/EBITDA — — —
EV/Sales — — —
Earnings yield (1.65%) 14.45% 4.72%
Free cash flow yield (62.53%) 22.07% 4.44%

Profitability

Metric SAR SCM Asset Management median
Gross margin 100.00% 100.00% 100.00%
Operating margin 67.89% 70.04% 33.42%
Net margin (3.35%) 30.66% 13.37%
Free cash flow margin (124.08%) 46.33% 12.36%
Return on equity (1.09%) 8.02% 4.79%
Return on assets (0.34%) 2.95% 1.55%
Return on invested capital 6.21% 2.12% 2.97%

Growth

Metric SAR SCM Asset Management median
Revenue growth (TTM) (4.15%) (5.52%) 7.42%
EPS growth (last fiscal year) 14.36% (46.93%) (6.67%)
Revenue growth, 5-year CAGR 16.87% 12.51% 12.51%
Net income growth, 5-year CAGR 19.89% 6.02% 0.00%

Health

Metric SAR SCM Asset Management median
Debt to equity 0.20 1.63 0.44
Current ratio 0.13 0.06 1.30
Net debt to EBITDA 0.50 8.41 1.02

Dividend

Metric SAR SCM Asset Management median
Dividend yield 22.85% 18.83% 6.60%
Payout ratio 3.50 1.30 0.94

Size

Metric SAR SCM Asset Management median
Market cap 236.82m 205.62m 694.86m

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