Contrasting TPG (NASDAQ:TPG) & Saratoga Investment (NYSE:SAR)

TPG (NASDAQ:TPGGet Free Report) and Saratoga Investment (NYSE:SARGet Free Report) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, valuation, analyst recommendations, profitability, earnings, dividends and risk.

Insider & Institutional Ownership

12.5% of TPG shares are owned by institutional investors. Comparatively, 14.6% of Saratoga Investment shares are owned by institutional investors. 78.7% of TPG shares are owned by insiders. Comparatively, 13.2% of Saratoga Investment shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Risk & Volatility

TPG has a beta of 1.63, suggesting that its share price is 63% more volatile than the S&P 500. Comparatively, Saratoga Investment has a beta of 1.32, suggesting that its share price is 32% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings for TPG and Saratoga Investment, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TPG 0 6 5 0 2.45
Saratoga Investment 0 4 1 0 2.20

TPG currently has a consensus price target of $39.04, suggesting a potential downside of 11.16%. Saratoga Investment has a consensus price target of $26.75, suggesting a potential upside of 18.21%. Given Saratoga Investment’s higher probable upside, analysts clearly believe Saratoga Investment is more favorable than TPG.

Profitability

This table compares TPG and Saratoga Investment’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TPG 3.35% 18.69% 7.21%
Saratoga Investment 16.45% 14.43% 4.46%

Dividends

TPG pays an annual dividend of $1.76 per share and has a dividend yield of 4.0%. Saratoga Investment pays an annual dividend of $2.92 per share and has a dividend yield of 12.9%. TPG pays out -4,398.9% of its earnings in the form of a dividend. Saratoga Investment pays out 150.5% 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. Saratoga Investment is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares TPG and Saratoga Investment’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
TPG $2.39 billion 6.70 $80.09 million ($0.04) -1,098.23
Saratoga Investment $99.10 million 3.12 $24.68 million $1.94 11.67

TPG has higher revenue and earnings than Saratoga Investment. TPG is trading at a lower price-to-earnings ratio than Saratoga Investment, indicating that it is currently the more affordable of the two stocks.

Summary

TPG beats Saratoga Investment on 10 of the 17 factors compared between the two stocks.

About TPG

(Get Free Report)

TPG Inc. operates as an alternative asset manager in the United States and internationally. The company offers investment management services to TPG Funds, limited partners, and other vehicles. It also offers monitoring services to portfolio companies; advisory, debt and equity arrangement, and underwriting and placement services; and capital structuring and other advisory services to portfolio companies. In addition, the company invests in private equity funds, real estate funds, hedge funds, and credit funds. TPG Inc. was founded in 1992 and is based in Fort Worth, Texas. The company operates as a subsidiary of TPG GP A, LLC.

About Saratoga Investment

(Get Free Report)

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. The firm prefers to invest in aerospace, automotive aftermarket and services, business products and services, consumer products and services, education, environmental services, industrial services, financial services, food and beverage, healthcare products and services, logistics, distribution, manufacturing, restaurants services, food services, software services, technology services, specialty chemical, media and telecommunications. It seeks to invest in the United States. The firm primarily invests $5 million to $50 million in companies having EBITDA of $2 million or greater and revenues of $8 million to $250 million. The firm prefer to take a majority stake. It invests through direct lending as well as participation in loan syndicates. The firm was formerly known as GSC Investment Corp. Saratoga Investment Corp. was formed on 2007 and is based in New York, New York with an additional office in Florham Park, New Jersey.

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