Monthly Dividend Stock In Focus: Saratoga Investment Corp.

Printed on March twenty third, 2026 by Bob Ciura

Month-to-month dividend shares have prompt attraction for a lot of revenue traders. Shares that pay their dividends every month provide extra frequent payouts than conventional quarterly or semi-annual dividend payers.

For that reason, we created a full record of over 100 month-to-month dividend shares.

You possibly can obtain our full Excel spreadsheet of all month-to-month dividend shares (together with metrics that matter like dividend yields and payout ratios) by clicking on the hyperlink under:

Saratoga Funding Corp. (SAR) is a month-to-month dividend inventory with a excessive yield.

This probably makes the inventory extra enticing for revenue traders on the lookout for extra frequent dividend payouts.

This text will analyze Saratoga Funding in higher element.

Enterprise Overview

Saratoga Funding Corp is a enterprise growth firm (BDC) that gives custom-made debt and fairness financing to U.S. middle-market corporations.

It focuses on revenue era by predominantly senior credit score devices. As of November thirtieth, 2025, the honest worth of its funding portfolio was $1,016.0 million, excluding $169.6 million in money and money equivalents.

The portfolio composition by honest worth was $852.5 million in first-lien time period loans (83.9%), $8.1 million in second-lien time period loans (0.80%), $16.3 million in unsecured loans (1.60%), $54.9 million in structured finance securities (5.40%), and $84.4 million in widespread fairness (8.3%).

Holdings span 39 distinct business classifications, with notable exposures in Healthcare Providers (largest single sector) at 9.7% of portfolio honest worth, Structured Finance Securities at 7.3%, and Client Providers at 6.0%.

Its portfolio combine helps a weighted common present yield of 9.7% throughout all investments. SAR’s technique emphasizes senior secured credit score with selective structured and fairness positions to steadiness yield and threat, supported by substantial liquidity and diversified financing sources.

On January seventh, 2026, Saratoga Funding Corp. reported its fiscal Q3 2026 outcomes. Complete funding revenue declined 11.8% yr over yr to $31.6 million, reflecting decrease base charges and a smaller common portfolio following elevated repayments over the previous yr.

Internet asset worth elevated to $413.2 million, or $25.59 per share, representing a 0.7% improve quarter over quarter. Internet funding revenue was $9.8 million, or $0.61 per share, representing a 32% decline from $0.90 per share within the prior yr interval.

The decline was attributable to decrease base rates of interest and a smaller common incomes asset base following elevated repayments over the previous 12 months.

Progress Prospects

From 2016 to 2019, NII/share rose from $1.91 to $2.60 as Saratoga scaled its portfolio meaningfully and grew curiosity revenue quicker than bills, regardless of some gradual yield compression.

The decline in 2020 to $1.59 was pushed by a mixture of decrease portfolio yields, COVID-era fee cuts, and better expense drag on a bigger steadiness sheet.

In 2021 and 2022 ($2.07 then $1.74), earnings recovered solely partially as asset progress continued however base charges have been nonetheless low and yields remained below strain, limiting incremental profitability regardless of an even bigger portfolio.

The main inflection got here in 2023 and 2024, when NII/share jumped from $2.94 to $4.49, pushed by each a a lot bigger portfolio and a pointy improve in asset yields as floating-rate loans reset larger whereas most liabilities re-priced extra slowly, creating robust internet curiosity margin enlargement.

In 2025, NII/share declined to $3.81 regardless that complete funding revenue elevated, reflecting some mixture of steadiness sheet contraction, larger funding prices, and margin normalization after the unusually favorable 2024 unfold atmosphere.

Shifting ahead, we imagine Saratoga can proceed to develop its NII/share by about 1% per yr.

Progress shall be pushed primarily by incremental portfolio progress, continued deployment of its sizable liquidity into high-yielding first-lien loans, and the earnings contribution from its SBIC and CLO platforms.

Progress could possibly be partially offset by larger funding prices, modest aggressive strain on spreads, and the normalization of internet curiosity margins from the unusually favorable 2023–2024 atmosphere.

Dividend & Valuation Evaluation

Traditionally, NII/share has proven notable volatility, peaking in 2020–2021, after which resetting decrease in 2022–2024 earlier than partially recovering in 2025.

This report exhibits that the corporate’s earnings energy expands sharply in favorable fee and credit score environments and contracts when spreads and leverage compress.

Right this moment, we imagine the inventory is undervalued, with a P/NII ratio of seven.3 in contrast with our honest worth estimate of 8.5. An increasing a number of might increase annual returns by 3.5% per yr over the subsequent 5 years.

Along with 1% anticipated NII-per-share progress and the 13.7% dividend yield, complete returns might attain 14.4% per yr over the subsequent 5 years.

Ultimate Ideas

General, the corporate gives a compelling, high-yielding revenue platform constructed on a senior-secured lending technique, however traders ought to stay conscious that earnings and dividends can nonetheless come below strain in extreme downturns.

In any case, we forecast annualized returns of 14.4% over the medium time period, pushed by the dividend yield, our progress forecast, and the potential for a a number of enlargement. Saratoga earns a maintain score.