Focus Financial Partners (NASDAQ:FOCS) and Saratoga Investment (NYSE:SAR) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their risk, valuation, institutional ownership, earnings, analyst recommendations, dividends and profitability.

Profitability

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

Net Margins Return on Equity Return on Assets
Focus Financial Partners N/A N/A N/A
Saratoga Investment 50.76% 10.52% 4.12%

Earnings & Valuation

This table compares Focus Financial Partners 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
Focus Financial Partners $662.88 million 4.00 -$48.35 million N/A N/A
Saratoga Investment $38.62 million 4.49 $17.67 million $2.27 10.25

Saratoga Investment has lower revenue, but higher earnings than Focus Financial Partners.

Institutional & Insider Ownership

14.3% of Saratoga Investment shares are held by institutional investors. 24.8% of Saratoga Investment shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

Saratoga Investment pays an annual dividend of $2.08 per share and has a dividend yield of 8.9%. Focus Financial Partners does not pay a dividend. Saratoga Investment pays out 91.6% 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 increased its dividend for 2 consecutive years.

Analyst Recommendations

This is a summary of current ratings and target prices for Focus Financial Partners and Saratoga Investment, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Focus Financial Partners 0 3 1 0 2.25
Saratoga Investment 0 2 3 0 2.60

Focus Financial Partners currently has a consensus price target of $47.00, suggesting a potential upside of 15.88%. Saratoga Investment has a consensus price target of $23.83, suggesting a potential upside of 2.46%. Given Focus Financial Partners’ higher possible upside, analysts plainly believe Focus Financial Partners is more favorable than Saratoga Investment.

Summary

Saratoga Investment beats Focus Financial Partners on 11 of the 14 factors compared between the two stocks.

Focus Financial Partners Company Profile

Focus Financial Partners Inc. provides wealth management services to primarily high net worth individuals and families. The company's wealth management services include investment advice, financial and tax planning, consulting, tax return preparation, family office services, and other services. It also offers recordkeeping and administration services. The company was founded in 2006 and is headquartered in New York, New York.

Saratoga Investment Company Profile

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.

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