PSEC - Prospect Capital: Quantity Over Quality

2024-01-28 08:30:00 ET

Summary

• Prospect Capital Corporation is a popular stock for income investors due to its monthly dividend of $0.06.
• PSEC has underperformed compared to other Business Development Companies in terms of price and total returns over the past 3, 5, and 10 years.
• PSEC's dividend has remained stagnant at $0.06 for the past 7 years, while other BDCs have raised their dividend and paid out special and supplemental dividends.
• PSEC's dividend is well-covered but there are higher quality BDCs for those with a longer outlook on the sector.

Introduction

Prospect Capital Corporation ( PSEC ) has been on my radar for quite a few years now. I remember hearing about them from my young investor days when I invested and traded through the app, Webull . I'm not sure if this is still the case but if you opened an account through the app, they would give you free shares of a stock which was usually Prospect Capital. Back then I wasn't very familiar with Business Development Companies, or BDCs....

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