7 Dividend Stocks with 10%+ Yield

3. Saratoga Investment Corp. (NYSE:SAR)

Dividend Yield as of July 16: 12.73%

Saratoga Investment Corp. (NYSE:SAR) is a New York-based capital market company that provides debt financing and equity capital to middle-market companies. Though the company has underperformed its peers over time, this year might be a turning point. Interest rates have remained stable and market expectations suggest minimal changes for the rest of the year. This stability has led to higher recurring net interest margins for the company’s portfolio in fiscal Q1 2025, compared to the previous year. The company’s strong reputation and unique market position, along with the continued development of sponsor relationships, are generating attractive investment opportunities from high-quality sponsors. In addition, there are early signs of a potential rise in mergers and acquisitions (M&A) in the lower middle market, as evidenced by multiple repayments in recent months. The company reported a total investment income of $38.7 million in fiscal Q1 2025, up 11.7% from the same period last year.

Saratoga Investment Corp. (NYSE:SAR)’s strong operating performance is built on the high quality, resilience, and balance of its $1.096 billion portfolio, even in the current environment. Despite significant challenges with two portfolio companies, Pepper Palace and Zollege, the company has taken decisive actions. This quarter, both investments were further marked down by $1.2 million, leaving a total combined remaining fair value of $4.4 million. The company has taken full control of these investments through consensual restructurings with the previous sponsors. The Zollege restructuring was completed in the first quarter, and the Pepper Palace restructuring is imminent. The company is actively implementing management changes, capital structure improvements, and business plan adjustments, which have the potential to increase future recovery value.

In addition to its growing portfolio, Saratoga Investment Corp. (NYSE:SAR) is also a strong dividend payer. On May 23, the company announced a 1.4% hike in its quarterly dividend to $0.74 per share. This marks the seventeenth consecutive quarterly dividend increase. This was the company’s first dividends for FY25, following a total of $2.85 per share in dividends for fiscal year 2024, which represented a 16.8% increase from the previous year. With a dividend yield of 12.73% as of July 16, SAR is one of the best dividend stocks on our list.

Saratoga Investment Corp. (NYSE:SAR) was a part of 3 hedge fund portfolios at the end of Q1 2024, compared with 6 in the previous quarter, according to Insider Monkey’s database. The stakes held by these hedge funds have a collective value of over $7.5 million. Among these funds, Two Sigma Advisors was the company’s leading stakeholder in Q1.