PSEC - Prospect Capital: This 13% Yield Is Safer Than Investors Think (Rating Upgrade)
2024-06-11 15:03:13 ET
Summary
- Prospect Capital is trading at a 38% discount to net asset value, potentially offering investment gains.
- The BDC has solid balance sheet quality with a low non-accrual percentage and strong distribution coverage.
- Prospect Capital has high insider ownership and a decoupled valuation, making it a potentially attractive investment for dividend investors.
Prospect Capital ( PSEC ) is trading at a discount to net asset value that is larger than it needs to be, in my opinion. Even under consideration of the company’s less-than-shiny track record when it comes to growing net asset value, I believe the current dividend is well-supported by net investment income and a dividend cut is out of the question. The BDC also has quite solid balance sheet quality, as its non-accrual percentage remained below 1% for quite a while. I do see a re-pricing opportunity for shares of Prospect Capital and believe that dividend investors potentially could see investment gains here as well!...
Prospect Capital: This 13% Yield Is Safer Than Investors Think (Rating Upgrade)