Prospect Capital Corporation (PSEC)
Prospect Capital: The Preferred Shares Are Overpriced Versus The Bonds
Prospect Capital Corporation offers perpetual, cumulative preferred shares with a 5.35% coupon and 7.9% current yield. PSEC common equity trades at a >50% discount to NAV, reflecting market skepticism about balance sheet quality and portfolio marks. PSEC.PR.A's yield is lower than PSEC's long-dated bonds, despite greater risk in bankruptcy, making the preferred equity unattractive on a risk/reward basis.
Prospect Capital: Stocks Sink, Bonds Lure
Prospect Capital Corporation trades at a deep 63% discount to NAV, near its istorical lows. PSEC's portfolio is 84% senior and senior secured, with significant sector diversification across 31 industries. Dividend cuts have been persistent, with the payout dropping ~22% in May 2024 and multiple reductions over the past decade.
Prospect Capital: Dividend Reset Doesn't Change Anything
Prospect Capital maintains a 'Strong Buy' rating as its investment thesis, although controversial, remains intact after Q3'26 earnings. PSEC's portfolio quality remained stable at 0.7%, outperforming peers, with first liens rising to 72%. The dividend was reset to $0.035 per-share monthly due to pressure from preferred stock offerings.
Prospect Capital Q3 Earnings Call Highlights
Prospect Capital NASDAQ: PSEC reported net investment income of $78 million, or $0.16 per common share, for its March quarter, as management emphasized a continuing shift toward first-lien senior secured middle-market lending and away from structured notes, real estate and other targeted equity-linked assets.
Prospect Capital Corporation (PSEC) Q3 2026 Earnings Call Transcript
Prospect Capital Corporation (PSEC) Q3 2026 Earnings Call Transcript
A 21% Yield With a Troubling Pattern Investors Should Not Ignore
Prospect Capital Corporation (NASDAQ:PSEC) pays a 21.7% annualized yield by sending shareholders $0.045 per share every month.
Prospect Capital: The 8% Yielding Preferreds Are The Only Reasonable Prospect
Prospect Capital common shares remain unattractive due to persistent NAV declines, a history of dividend cuts, and ongoing dilution from new share issuance. PSEC's Series A Preferreds (PSEC.PR.A) offer an 8.07% current yield, fully covered by net investment income, and trade at a 35% discount to redemption value. The common dividend is not fully covered when accounting for preferreds, while preferred coupon payments are secure. The yields on both reflect higher perceived credit risk in PSEC's portfolio.
Retirees Are Asking If PSEC's Monthly Income Is Safe After That 25% Dividend Cut
Prospect Capital ( NASDAQ:PSEC ) is a business development company that lends to middle-market businesses, collecting interest income and passing most of it to shareholders as monthly distributions.
Prospect Capital: A 'Red Flag' Investment
Prospect Capital Corporation (PSEC) has delivered a 65% price decline over the past decade, with persistent book value erosion and repeated dividend cuts. PSEC is transitioning its portfolio toward lower-risk first-lien loans, now at 71%, but still faces high market skepticism reflected in a 59% NAV discount. Despite a 20% forward dividend yield and 1.26x coverage, PSEC's high PIK income and unclear future portfolio composition raise concerns about dividend sustainability.
Prospect Capital Corporation (PSEC) Q1 2026 Earnings Call Transcript
Prospect Capital Corporation ( PSEC ) Q1 2026 Earnings Call November 7, 2025 9:00 AM EST Company Participants John Barry - Chairman of the Board & CEO Kristin Van Dask - CFO, Treasurer, Secretary & Chief Compliance Officer Michael Eliasek - President, COO & Director Conference Call Participants Finian O'Shea - Wells Fargo Securities, LLC, Research Division Presentation Operator Good day, and welcome to the Prospect Capital First Fiscal Quarter 2026 Earnings Release and Conference Call. [Operator Instructions] Please note, this event is being recorded.
Prospect Capital: 15% Yield Headed For Another Cut
Previously maintained a cautious hold rating on Prospect Capital, favoring bonds over common stock and preferred shares. The stock has heavily underperformed and justified the decision to stay out. We go over the recent results and tell you why the new dividend is likely to get cut within a year.
Prospect Capital: Out-Of-Touch Valuation
Prospect Capital's dividend cut has improved payout safety, aligning distributions with lower net investment income and enhancing the margin of safety for passive income investors. The portfolio shift toward first-lien debt has stabilized credit quality, with non-accruals remaining low at 0.6%, despite a decline in overall income. High insider ownership (29%) and a 55% discount to NAV suggest the stock is undervalued, offering a compelling risk/reward for patient investors.
