Saratoga Investment Stock Earnings Reports

Saratoga Investment Corp. reported fiscal Q1 2026 results with mixed near-term earnings but strong balance sheet and portfolio quality. Key positives: NAV rose to $396.4M (up 7.8% YoY), NAV per share was $25.52 (adjusted higher if excluding a one‑time monthly dividend timing effect), 12‑month ROE improved to 9.3% (above the BDC industry average), and adjusted NII per share increased sequentially to $0.66. Management declared a quarterly dividend of $0.75 ($0.25/month) yielding ~11.8% based on the July 7 stock price. The company ended the quarter with significant liquidity—$224M cash, $136M undrawn SBA debentures and undrawn revolvers—for a total ~$430M capacity, which management says provides flexibility to deploy capital accretively or manage debt maturities. Portfolio credit quality remains high (only two restructured nonaccruals), 86.9% first‑lien exposure, core non‑CLO portfolio ~1.7% above cost, and total portfolio fair value ~2.1% below cost. Activity was impacted by a slow lower‑middle‑market M&A environment and higher prepayments/refinancings, producing lower AUM and lower year‑over‑year NII primarily from lower short‑term rates and repayments. Management’s strategic response is disciplined underwriting, ramping business development hires to grow proprietary deal flow, selective deployment (including selective BB/BBB CLO debt investments), and maintaining liquidity and optionality to navigate uncertain macro conditions.