Prospect Capital: The 8% Yielding Preferreds Are The Only Reasonable Prospect
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Pacifica Yield13.86K FollowersFollow5ShareSavePlay(6min)CommentsSummaryProspect Capital common shares remain unattractive due to persistent NAV declines, a history of dividend cuts, and ongoing dilution from new share issuance.PSEC's Series A Preferreds (PSEC.PR.A) offer an 8.07% current yield, fully covered by net investment income, and trade at a 35% discount to redemption value.The common dividend is not fully covered when accounting for preferreds, while preferred coupon payments are secure. The yields on both reflect higher perceived credit risk in PSEC's portfolio. J Studios/DigitalVision via Getty Images Prospect Capital's (PSEC) constant net asset value ("NAV") dip and history of dividend cuts have kept the common shares as an avoid, but the 5.35% Series A Fixed Rate Cumulative Preferreds (This article was written byPacifica Yield13.86K FollowersFollowThe equity market is a powerful mechanism as daily fluctuations in price get aggregated to incredible wealth creation or destruction over the long term. Pacifica Yield aims to pursue long-term wealth creation with a focus on undervalued yet high-growth companies, high-dividend tickers, REITs, and green energy firms.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.