Analyzing PowerShares QQQ Trust, Series 1 (QQQ) & Saratoga Investment Corp (NYSE:SAR)

PowerShares QQQ Trust, Series 1 (NASDAQ: QQQ) and Saratoga Investment Corp (NYSE:SAR) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their valuation, institutional ownership, profitabiliy, analyst recommendations, earnings, dividends and risk.

Dividends

PowerShares QQQ Trust, Series 1 pays an annual dividend of $1.30 per share and has a dividend yield of 0.9%. Saratoga Investment Corp pays an annual dividend of $1.88 per share and has a dividend yield of 9.1%. Saratoga Investment Corp pays out 119.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Volatility & Risk

PowerShares QQQ Trust, Series 1 has a beta of 1.13, meaning that its stock price is 13% more volatile than the S&P 500. Comparatively, Saratoga Investment Corp has a beta of 0.5, meaning that its stock price is 50% less volatile than the S&P 500.

Institutional and Insider Ownership

35.9% of PowerShares QQQ Trust, Series 1 shares are owned by institutional investors. Comparatively, 16.2% of Saratoga Investment Corp shares are owned by institutional investors. 31.8% of Saratoga Investment Corp shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares PowerShares QQQ Trust, Series 1 and Saratoga Investment Corp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
PowerShares QQQ Trust, Series 1	N/A	N/A	N/A
Saratoga Investment Corp	26.84%	8.03%	3.19%

Analyst Recommendations

This is a summary of current ratings and price targets for PowerShares QQQ Trust, Series 1 and Saratoga Investment Corp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PowerShares QQQ Trust, Series 1	0	0	0	0	N/A
Saratoga Investment Corp	0	0	0	0	N/A

Earnings & Valuation

This table compares PowerShares QQQ Trust, Series 1 and Saratoga Investment Corp’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	EBITDA	Earnings Per Share	Price/Earnings Ratio
PowerShares QQQ Trust, Series 1	N/A	N/A	N/A	N/A	N/A
Saratoga Investment Corp	$33.96 million	3.63	$9.43 million	$1.58	13.07

Saratoga Investment Corp has higher revenue and earnings than PowerShares QQQ Trust, Series 1.

Summary

Saratoga Investment Corp beats PowerShares QQQ Trust, Series 1 on 6 of the 9 factors compared between the two stocks.

About PowerShares QQQ Trust, Series 1

PowerShares QQQ Trust, Series 1 is a unit investment trust that issues securities called Nasdaq-100 Index Tracking Stock. The Trust’s investment objective is to provide investment results that generally correspond to the price and yield performance of the Nasdaq-100 Index. The Trust provides investors with the opportunity to purchase units of beneficial interest in the Trust representing proportionate undivided interests in the portfolio of securities held by the Trust, which consists of substantially all of the securities, in substantially the same weighting, as the component securities of the Nasdaq-100 Index. Invesco PowerShares Capital Management, LLC is the Sponsor of the Trust and The Bank of New York Mellon is the Trustee.

About Saratoga Investment Corp

Saratoga Investment Corp. is a specialty finance company. The Company is an externally managed, closed-end, non-diversified management investment company. The Company invests primarily in leveraged loans and mezzanine debt issued by private middle-market companies in the United States. Its investment objective is to generate current income and, to a lesser extent, capital appreciation from its investments. It purchases mezzanine debt and makes equity investments in middle market companies. It may invest in other investments, such as investments in distressed debt, including securities of companies in bankruptcy, foreign debt, private equity, securities of public companies that are not thinly traded and structured finance vehicles, such as collateralized loan obligation funds. Its leveraged loan portfolio consists primarily of first lien and second lien term loans. The Company’s investment activities are externally managed and advised by Saratoga Investment Advisors, LLC.