PSEC - Prospect Capital: 13.4% Dividend Yield But Will NAV Dip Forever?
2024-02-11 21:28:19 ET
Summary
- Prospect Capital saw its NAV per share fall by 33 cents year-over-year during its recently reported quarter.
- Dividend coverage at 133% remains significant, but it is down from 150% a year ago.
- Net investment income per share dipped by 3 cents year-over-year, with the outlook for a recovery made dark with Fed rate cuts on the horizon.
The stability of Prospect Capital's ( PSEC ) net asset value was at stake going into its fiscal 2024 second-quarter earnings. This figure had been dipping in the quarters preceding and fell by 33 cents to $8.92 per share during the second quarter or to $3.68 billion on a nominal basis. PSEC's NAV trend has not been ideal with continued NAV declines almost certain to follow what's shaping up to be reductions to the Fed funds rate that could start as soon as the 01 May 2024 Fed meeting. Focusing on the NAV is important as the stock price broadly tracks the direction of NAV and total returns are constituted from both dividend and capital gains or losses....
Prospect Capital: 13.4% Dividend Yield, But Will NAV Dip Forever?