Prospect Capital Corporation (PSEC) — Dividend Yield, NAV & Valuation Analysis
PSEC · NASDAQ
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Overview
Prospect Capital Corporation is one of the oldest publicly traded BDCs, having operated since 2004. PSEC is known for its monthly dividend payments and a diversified investment strategy that spans senior secured loans, mezzanine debt, and equity investments. The company focuses on companies with stable cash flows and tangible asset bases. PSEC has a notable track record of consistent monthly distributions.
Key Metrics
| Metric | Value |
|---|---|
| 1-Year Total Return | 8.2% |
| 3-Year Total Return | 18.5% |
| 5-Year Total Return | 32% |
| Expense Ratio | 11.5% |
| Leverage Ratio | 0.95x |
| Portfolio Companies | 120 |
| Total Assets | $3.1B |
Discount / Premium to NAV
| Stock Price | $2.23 |
| NAV per Share | $6.85 |
| Premium / (Discount) to NAV | -67.4% |
| Implied per-share NAV gap | $4.62 |
The premium / discount to NAV compares the current stock price to the per-share net asset value of Prospect Capital Corporation's investment portfolio. A negative reading (a discount) means the market is pricing PSEC below the value of its underlying assets and is one of the most-watched valuation metrics for any BDC. A positive reading (a premium) means the market is paying a premium over the stated NAV, often reflecting confidence in future dividend coverage and portfolio credit quality. Prospect Capital Corporation currently trades at a -67.4% discount to NAV.
Investment Strategy
Prospect Capital Corporation focuses on senior secured loans, mezzanine debt, equity investments in the consumer, energy, financial services, healthcare sectors. The company targets middle-market companies and maintains a portfolio of 120 investments totaling $3.1B in assets.
Management
CEO: John F. Barry III | Employees: 40
Suitability
PSEC is suitable for income-focused investors seeking monthly dividend income with a 22.4% yield. The BDC's focus on senior secured loans provides defensive portfolio characteristics. Investors should consider their risk tolerance and investment objectives before investing.