Saratoga Investment (NYSE:SAR) and Westwood Holdings Group (NYSE:WHG) are both small-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, earnings, dividends, institutional ownership, valuation, risk and profitability.
Risk and Volatility
Saratoga Investment has a beta of 0.6, suggesting that its share price is 40% less volatile than the S&P 500. Comparatively, Westwood Holdings Group has a beta of 1.35, suggesting that its share price is 35% more volatile than the S&P 500.
16.8% of Saratoga Investment shares are owned by institutional investors. Comparatively, 66.3% of Westwood Holdings Group shares are owned by institutional investors. 24.8% of Saratoga Investment shares are owned by insiders. Comparatively, 9.0% of Westwood Holdings Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
This table compares Saratoga Investment and Westwood Holdings Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Westwood Holdings Group||21.87%||17.84%||15.58%|
Saratoga Investment pays an annual dividend of $2.12 per share and has a dividend yield of 9.2%. Westwood Holdings Group pays an annual dividend of $2.88 per share and has a dividend yield of 7.4%. Saratoga Investment pays out 93.4% 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 raised its dividend for 3 consecutive years and Westwood Holdings Group has raised its dividend for 8 consecutive years.
This is a breakdown of recent recommendations and price targets for Saratoga Investment and Westwood Holdings Group, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Westwood Holdings Group||0||0||0||0||N/A|
Saratoga Investment currently has a consensus target price of $24.50, indicating a potential upside of 6.15%. Given Saratoga Investment’s higher probable upside, equities analysts clearly believe Saratoga Investment is more favorable than Westwood Holdings Group.
Earnings and Valuation
This table compares Saratoga Investment and Westwood Holdings Group’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Saratoga Investment||$38.62 million||4.51||$17.67 million||$2.27||10.17|
|Westwood Holdings Group||$122.30 million||2.87||$26.75 million||N/A||N/A|
Westwood Holdings Group has higher revenue and earnings than Saratoga Investment.
Westwood Holdings Group beats Saratoga Investment on 9 of the 15 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 Westwood Holdings Group
Westwood Holdings Group, Inc., through its subsidiaries, manages investment assets and provides services for its clients. The company operates in two segments, Advisory and Trust. The Advisory segment provides investment advisory services to corporate retirement plans, public retirement plans, endowments, foundations, individuals, and the Westwood Funds; and investment sub-advisory services to mutual funds, pooled investment vehicles, and its Trust segment. The Trust segment offers trust and custodial services; and participates in common trust funds that it sponsors to institutions and high net worth individuals. Westwood Holdings Group, Inc. was founded in 1983 and is based in Dallas, Texas.
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