Prospect Capital Corporation (NASDAQ: PSEC) is one of 575 publicly-traded companies in the “Closed End Funds” industry, but how does it contrast to its rivals? We will compare Prospect Capital Corporation to similar companies based on the strength of its dividends, valuation, earnings, profitability, institutional ownership, analyst recommendations and risk.

Dividends

Prospect Capital Corporation pays an annual dividend of $0.72 per share and has a dividend yield of 10.9%. Prospect Capital Corporation pays out 102.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Closed End Funds” companies pay a dividend yield of 8.7% and pay out 87.0% of their earnings in the form of a dividend.

Profitability

This table compares Prospect Capital Corporation and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Prospect Capital Corporation 36.08% 8.98% 4.94%
Prospect Capital Corporation Competitors -49.41% 6.60% 5.17%

Insider and Institutional Ownership

15.2% of Prospect Capital Corporation shares are held by institutional investors. Comparatively, 23.2% of shares of all “Closed End Funds” companies are held by institutional investors. 7.1% of Prospect Capital Corporation shares are held by insiders. Comparatively, 4.5% of shares of all “Closed End Funds” companies are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Risk & Volatility

Prospect Capital Corporation has a beta of 0.51, suggesting that its stock price is 49% less volatile than the S&P 500. Comparatively, Prospect Capital Corporation’s rivals have a beta of 0.55, suggesting that their average stock price is 45% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations for Prospect Capital Corporation and its rivals, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Prospect Capital Corporation 1 3 0 0 1.75
Prospect Capital Corporation Competitors 192 1188 1413 14 2.44

Prospect Capital Corporation currently has a consensus price target of $7.17, indicating a potential upside of 8.09%. As a group, “Closed End Funds” companies have a potential upside of 40.71%. Given Prospect Capital Corporation’s rivals stronger consensus rating and higher possible upside, analysts plainly believe Prospect Capital Corporation has less favorable growth aspects than its rivals.

Earnings & Valuation

This table compares Prospect Capital Corporation and its rivals gross revenue, earnings per share and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Prospect Capital Corporation N/A N/A 9.47
Prospect Capital Corporation Competitors $57.58 million $38.86 million -0.16

Prospect Capital Corporation’s rivals have higher revenue and earnings than Prospect Capital Corporation. Prospect Capital Corporation is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Summary

Prospect Capital Corporation rivals beat Prospect Capital Corporation on 9 of the 14 factors compared.

Prospect Capital Corporation Company Profile

Prospect Capital Corporation is a financial services company. The Company primarily lends to and invests in middle market privately held companies. The Company is a closed-end investment company. Its investment objective is to generate both current income and long-term capital appreciation through debt and equity investments. The Company invests primarily in senior and subordinated debt and equity of private companies in need of capital for acquisitions, divestitures, growth, development, recapitalizations and other purposes. The Company makes investments, including lending in private equity sponsored transactions, lending directly to companies not owned by private equity firms, control investments in corporate operating companies, control investments in financial companies, investments in structured credit, real estate investments, investments in syndicated debt, aircraft leasing and online lending. The Company is managed by its investment advisor, Prospect Capital Management L.P.

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