PSEC - Prospect Capital: The 12.7% Dividend Yield Could Be At Risk
2024-05-23 11:16:35 ET
Summary
- Prospect Capital's monthly cash dividend remains unchanged at $0.06 per share, resulting in a 12.7% dividend yield.
- The BDC's net investment income for the third quarter beat consensus but was down sequentially and from the year-ago quarter.
- Prospect Capital is not fully covering its current dividend distributions. This could be ominous as the Fed looks set to cut interest rates.
Prospect Capital (PSEC) last declared a monthly cash dividend of $0.06 per share , kept unchanged from its prior quarter and $0.72 per share annualized for a 12.7% dividend yield. The BDC generated fiscal 2024 third quarter net investment income ("NII") of $94.4 million, $0.23 per share , beating consensus but down sequentially from $0.24 per share and by 3 cents from the year-ago period. PSEC's third quarter ended March 31, 2024. The dividend has been stable at its current level since 2018 but has come against GAAP NAV sporadically dipping since 2022. PSEC's portfolio at the end of its third quarter held a fair value of $7.8 billion , spread across 122 portfolio companies, with its equity position in private equity REIT National Property REIT Corp its largest allocation. The REIT owns a portfolio of multifamily, senior living, and student housing properties....
Prospect Capital: The 12.7% Dividend Yield Could Be At Risk