A portfolio of stocks I've been building since September 3 is named Volio Folio. It will eventually hold 52 dividend dogs. Volio is the fifth portfolio I've built (at a one dividend dog per-week pace) since 2014. Five portfolios = V for Volio!

I'm reviewing today the fifth of five financial services stocks striving to be picked to join the Volio folio collection. This could be the seventh pick for Volio!

That financial sector includes twenty industries ranging from Asset Management to 8 kinds of Banks, Credit, Exchanges, 6 kinds of Insurance, Savings, and all such financial institutions.

My subject today is a small cap asset management company, Saratoga Investment Corp. Their trading ticker symbol is SAR.This is my first report on SAR.

Saratoga Investment Corp is a specialty finance company, which 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. Its portfolio comprises investments in leveraged loans, which are generally senior debt instruments that rank ahead of subordinated debt of the portfolio company issued by middle market companies. In addition, it also purchases mezzanine debt, which is unsecured and subordinated to senior debt of the portfolio company and makes equity investments in middle market companies.

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.

I use three key data points to gauge dividend-paying equities or funds like Saratoga Investment Corp. (SAR):

(1) Price

(2) Dividends

(3) Returns

Besides those three, several other keys will finally unlock an equity or fund in which to invest, or not.

Those three basic keys, however, best tell whether a company has made, is making, and will make money.

SAR Price

Saratoga's price per share closed at $24.84 yesterday. A year ago its price was $22.92. So, in the past year, its price grew $1.92 or 7.73%.

Assuming Saratoga's stock trades in the range of $20.00 to $28.00 this next year, Saratoga's recent $24.84 price could rise by $1.16 and get to $26.00 by mid-October, 2020, assuming its upward price momentum continues.

SAR Dividends

Saratoga's latest declared quarterly dividend was $0.56, paid September 26th.

That $0.56 Q dividend equates to $2.24 annually and yields 9.02% based on yesterday's $24.84 closing price.

SAR Gains?

Adding the $2.24 annual estimated dividend to my $1.16 estimate ofSaratoga's price upside shows a $3.40 potential gross gain, per share, which will be reduced by costs to trade these shares.

Say we put a little under $1,000.00 today into Saratoga Investment Corp at its recent $24.84 price, we'd buy 40 shares of SAR.

A $10 broker fee paid half at purchase and half at sale might cost us $0.25 per share.

Subtract that $0.25 brokerage cost from the estimated $3.40 gross estimated gain leaves a net gain of $3.15 X 40 shares = $126.00 or a 12.6% net gain on a $993.60 investment.

Therefore, Saratoga Investment Corp, whose trading ticker symbol is SAR now shows a possible net gain of 12.6% including a 9.02% dividend yield. It could be more, it could be less.

The above speculation is based on past year performance. The actual results remain to be seen to learn if Saratoga Investment Corp (SAR) is worth your time and money.