Prospect Capital: This 13% Yield Is Safer Than Investors Think (Rating Upgrade)
Prospect Capital is trading at a 38% discount to net asset value, potentially offering investment gains. The BDC has solid balance sheet quality with a low non-accrual percentage and strong distribution coverage. Prospect Capital has high insider ownership and a decoupled valuation, making it a potentially attractive investment for dividend investors.
Prospect Capital Is A Steal
Prospect Capital Corporation's loan quality and dividend coverage remain healthy. The BDC is originating new loans, which will contribute to its net investment income and potentially improve dividend coverage. Despite a 37% discount to net asset value, the stock's 13% yield makes it a worthwhile investment for passive income investors.
Prospect Capital: Dividend Safety And Valuation Attractive, But Weaker Fundamentals Concerning
Prospect Capital's share price has declined double-digits over the past year due to weaker fundamentals and portfolio quality. The company's declining financials and NAV erosion are concerning, but it still offers a monthly dividend with a comfortable coverage ratio. The stock is undervalued with a P/NAV ratio of 0.63x, but risks include exposure to the high interest rate environment and real estate market.
