Prospect Capital Corporation (NASDAQ:PSEC) had its price target decreased by National Securities from $7.00 to $6.00 in a research report report published on Wednesday, August 30th. National Securities currently has a sell rating on the financial services provider’s stock.
“• PSEC’s quarterly dividend was cut from $0.25/share to $0.18/share for the quarter ending 12/31/17. We had modeled the dividend to be reduced to $0.17/share in the quarter. We expect another cut to $0.16/share in fiscal 3Q19. Non-accruals certainly weighed on earnings for the quarter, increasing to $286.4 million at amortized cost of 4.8% of the portfolio from $209.5 million or 3.3% of the portfolio Q/Q. True to form, PSEC realized losses of $97.1 million during the quarter largely pertaining to the disposition of four previous non-accruals although as of 3/31/17 these non-accruals had unrealized depreciation of $68.3 million combined.
• Somewhat miraculously, CLO equity cash yields increased Q/Q and GAAP yields were flat. While we appreciate the optionality that a CLO provides, specifically pertaining to refinances and resets during times of tightening credit spreads, many collateral managers have also completed substantial refinances and resets and still had yields decrease. We have always remained skeptical of Prospect’s structured credit accounting and are quite frankly amazed that GAAP yields could be stable in a quarter where the overwhelming complacency in loan markets has continued to hinder the reinvestment opportunities and thus crimping cash flows despite the partial offset of refinances.
• We are revising our fiscal 2018 NII/share estimate to $0.72 from $0.79 and are rolling out our fiscal 2019 NII/share estimate of $0.73/share. ,” the firm’s analyst wrote.
A number of other analysts also recently issued reports on the stock. UBS AG raised shares of Prospect Capital Corporation from an underperform rating to a market perform rating in a report on Wednesday, August 30th. BidaskClub downgraded shares of Prospect Capital Corporation from a sell rating to a strong sell rating in a report on Tuesday, August 22nd. Zacks Investment Research upgraded shares of Prospect Capital Corporation from a sell rating to a hold rating in a research report on Wednesday, July 26th. BMO Capital Markets restated a hold rating and set a $7.00 price objective on shares of Prospect Capital Corporation in a research report on Thursday, June 1st. Finally, FBR & Co cut shares of Prospect Capital Corporation from an outperform rating to a market perform rating and reduced their target price for the company from $9.50 to $8.50 in a research report on Thursday, May 11th. Three analysts have rated the stock with a sell rating, four have given a hold rating and one has given a buy rating to the company’s stock. Prospect Capital Corporation currently has an average rating of Hold and an average target price of $8.04.
Shares of Prospect Capital Corporation (PSEC) traded down 0.30% during mid-day trading on Wednesday, hitting $6.70. The stock had a trading volume of 2,463,442 shares. The stock’s 50-day moving average is $7.38 and its 200 day moving average is $8.33. Prospect Capital Corporation has a 1-year low of $6.54 and a 1-year high of $9.58.
Prospect Capital Corporation (NASDAQ:PSEC) last released its quarterly earnings data on Monday, August 28th. The financial services provider reported $0.19 EPS for the quarter, missing the consensus estimate of $0.21 by ($0.02). Prospect Capital Corporation had a net margin of 36.08% and a return on equity of 8.98%. The business had revenue of $166.70 million during the quarter, compared to analysts’ expectations of $177.21 million. During the same period last year, the company earned $0.26 earnings per share. The firm’s revenue was down 13.6% on a year-over-year basis. On average, equities research analysts forecast that Prospect Capital Corporation will post $0.78 EPS for the current year.
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The company also recently disclosed a monthly dividend, which will be paid on Wednesday, November 22nd. Investors of record on Tuesday, October 31st will be issued a $0.06 dividend. This represents a $0.72 dividend on an annualized basis and a dividend yield of 10.75%. The ex-dividend date is Monday, October 30th. Prospect Capital Corporation’s dividend payout ratio is currently 142.86%.
In related news, CFO Brian H. Oswald bought 50,000 shares of the stock in a transaction on Friday, September 1st. The stock was bought at an average price of $6.73 per share, with a total value of $336,500.00. Following the completion of the purchase, the chief financial officer now directly owns 493,373 shares in the company, valued at approximately $3,320,400.29. The acquisition was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. Company insiders own 6.60% of the company’s stock.
Several hedge funds and other institutional investors have recently bought and sold shares of the company. Rhumbline Advisers boosted its stake in shares of Prospect Capital Corporation by 0.3% in the second quarter. Rhumbline Advisers now owns 26,791 shares of the financial services provider’s stock valued at $218,000 after purchasing an additional 70 shares during the period. Advisory Services Network LLC boosted its stake in shares of Prospect Capital Corporation by 0.6% in the second quarter. Advisory Services Network LLC now owns 17,741 shares of the financial services provider’s stock valued at $144,000 after purchasing an additional 105 shares during the period. Essex Financial Services Inc. boosted its stake in shares of Prospect Capital Corporation by 0.7% in the first quarter. Essex Financial Services Inc. now owns 45,115 shares of the financial services provider’s stock valued at $408,000 after purchasing an additional 293 shares during the period. Suntrust Banks Inc. boosted its stake in shares of Prospect Capital Corporation by 0.6% in the first quarter. Suntrust Banks Inc. now owns 64,800 shares of the financial services provider’s stock valued at $585,000 after purchasing an additional 388 shares during the period. Finally, CWA Asset Management Group LLC boosted its stake in shares of Prospect Capital Corporation by 1.4% in the first quarter. CWA Asset Management Group LLC now owns 42,543 shares of the financial services provider’s stock valued at $385,000 after purchasing an additional 593 shares during the period. 15.32% of the stock is owned by institutional investors and hedge funds.
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.
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