Prospect Capital's Preferred Stock Yield Surpasses 7%

Shares of Prospect Capital Corporation's preferred stock demonstrate a yielding potential above 7%, which surpasses the sector average, indicating a potential investment opportunity amidst its discount to liquidation preference.

Date: 12-12-2024

AI Rating: 7

The report presents details about Prospect Capital Corporation's 5.35% Series A Cumulative Preferred Stock (PSEC.PRA), showing a significant yield advantage with over 7% returning based on its quarterly dividend of $1.3375 annually. This yield exceeds the average of 6.48% within the financial preferred stock category, suggesting a potential to attract income-focused investors looking for higher returns.

Additionally, PSEC.PRA is noted to trade at a 22.04% discount to its liquidation preference compared to the sector's average discount of 6.58%. Such a steep discount could imply an undervaluation in the market, making it an attractive proposition for investors willing to look past current market fluctuations.

On the trading day, PSEC.PRA reported a decrease of 1.8% in share value, while its common shares (PSEC) experienced a slight increase of 0.7%. This contrast indicates that investors may be shifting towards the common shares, although the preferred stock still maintains a strong yield.

Stocks: PSEC