The deterioration in NII and NAV per share signals ongoing pressure on earnings power despite AUM growth. Watch Q1 fiscal 2027 results for rate sensitivity and ability to maintain dividend coverage; the 12.6% dividend yield may attract income investors but coverage is thinning.
Price Chart
Executive Summary
Saratoga Investment Corp. reported a weak fiscal Q4 2026 with a GAAP net loss of $0.16 per share, NII per share down to $0.48 (vs $0.56 YoY), and NAV per share declining 5.6% year-over-year. Full-year investment income fell 15.5% to $125.7M, driven by lower interest rates and spread compression, though annual ROE improved to 9.1%.
Key Financial Metrics
Key Facts
- Q4 GAAP EPS: ($0.16) vs ($0.05) prior year
- Q4 Adjusted NII per share: $0.53, down from $0.56 prior year
- Full-year NII per share: $2.32, down 39% from $3.81
- NAV per share: $24.42, down from $25.86 year-over-year
- Total investment income Q4: $31.1M, down 0.5% YoY
- Annual ROE 9.1% vs 7.5% prior year, beat BDC industry average of 4.3%
- Portfolio marked down $9.6M in Q4, including $3.1M from core non-CLO
- AUM grew 13.4% to $1.109B, net originations $101.1M in Q4
- Non-accruals remain low at 0.2% of fair value
- Dividend maintained at $0.75/share quarterly
Financial Impact
Declining net investment income and NAV per share reflect structural headwinds from falling SOFR rates and spread compression; Q4 GAAP loss driven by $9.6M portfolio markdown.
Risk Factors
- Continued decline in SOFR rates eroding floating-rate asset yields
- Spread compression on new originations vs. repaid assets
- Potential for further portfolio markdowns affecting NAV
- Excise tax expense weighing on adjusted NII
Market Snapshot
Documents Analyzed
This report is based on 6 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001213900-26-052225 |
| Document: ea0289168-8k_saratoga.htm | 0001213900-26-052225 |
| Document: 0001213900-26-052225-index-headers.html | 0001213900-26-052225 |
| Document: 0001213900-26-052225-index.html | 0001213900-26-052225 |
| Document: 0001213900-26-052225.txt | 0001213900-26-052225 |
| 8-K Data (Synthetic) | 0001213900-26-052225 |
US Market Status
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