Prospect Capital

PSEC

Market cap $1.31B

While most of Wall Street focuses on large and mega-cap stocks, as they provide a degree of safety and liquidity, many investors are limited in the number of shares they can buy.

BDCs have already experienced a notable correction. The sector median P/NAV metric indicates ~12% discount to NAV. Many players are priced even below that.

Prospect Capital Corp. offers a tempting 20% yield and deep discount to NAV, but fundamentals continue to deteriorate. PSEC's declining net asset value, rising non-accruals, and weakening dividend coverage signal ongoing financial erosion and capital loss risk. Despite defensive portfolio shifts and strong liquidity, PSEC's changes may be too late, with further dividend cuts and share price declines likely.

NEW YORK, Sept. 19, 2025 (GLOBE NEWSWIRE) -- Town & Country Living has been in the business of home since 1954, making products for the biggest retailers and brands domestically and across the globe. Known as the “brand behind the brands”, the company has grown over the years to a cross-category giant in the home furnishings industry designing and selling home textiles for every room of the home – from kitchen, to bath, living rooms, bedrooms rugs and décor for both indoors and outdoors.

While most of Wall Street focuses on large and mega-cap stocks, as they provide a degree of safety and liquidity, many investors are limited in the number of shares they can buy. Many of the most significant public companies, especially the technology giants, trade at prices up to $1,000 per share, while many are in the low to mid-hundreds. It is hard to get decent share count leverage at those steep prices. Many investors, especially more aggressive traders, look at lower-priced stocks to make a profit and increase their share count. That can help the decision-making process, especially when you are on to a winner, as you can always sell half and keep half.

NEW YORK, Sept. 12, 2025 (GLOBE NEWSWIRE) -- Priority Income Fund, Inc. (“Priority Income Fund” or the “Fund”) announced today that the Fund's Board of Directors has declared monthly cash “base” and “bonus” common shareholder distributions for September 2025, October 2025 and November 2025. The distributions remain consistent with prior declared monthly distributions.

Prospect Capital is shifting its portfolio toward higher-quality first lien senior secured loans, reducing riskier second lien and equity-linked investments like real estate. The investment firm improved its non-accrual percentage by 50% sequentially in Q4 2025, signaling better balance sheet quality. Despite double-digit Y/Y portfolio and NII declines in Q4 2025, the BDC fully supported its payout with net investment income, suggesting that another dividend cut at this point is highly unlikely.

We take a look at the action in business development companies through the fourth week of August and highlight some of the key themes we are watching. BDCs delivered their best weekly performance, rallying over 1%, despite market concerns about upcoming Fed rate cuts and sector underperformance. Prospect Capital rallied on signs of a strategic pivot, exiting CLO Equity, selling REIT assets, and planning greater credit facility use.

Prospect Capital Corporation (NASDAQ:PSEC ) Q4 2025 Earnings Conference Call August 27, 2025 9:00 AM ET Company Participants John Francis Barry - Chairman of the Board & CEO Kristin Lea Van Dask - CFO, Treasurer, Secretary & Chief Compliance Officer Michael Grier Eliasek - President, COO & Director Conference Call Participants Finian Patrick O'Shea - Wells Fargo Securities, LLC, Research Division Operator Good day, and welcome to the Prospect Capital Fourth Quarter and Fiscal Year-End Earnings Release and Conference Call. [Operator Instructions] Please note, this event is being recorded.

Prospect Capital's share price and NAV continue to decline, with weak earnings and underperformance despite a high 19% dividend yield. The portfolio's heavy exposure to real estate and healthcare, plus high interest rate sensitivity, increases risk and limits recovery potential. Recent earnings show declining net investment income and insufficient new investments, deepening NAV erosion, and sector underperformance.