Dividends4Life: 9% Yield, 11% Discount, Monthly Payer

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9% Yield, 11% Discount, Monthly Payer

Posted by D4L | Monday, April 26, 2021 | | 0 comments »

Business Development Companies (BDCs) offer retail investors exposure to privately-held firms, which often are funded by venture capital firms. However, since they invest in privately-held companies, it's up to a BDC's management to keep investors informed on the economic health of their portfolio companies. This BDC yields 9.02% and pays monthly. It's selling at a -10.94% discount to NAV/share. Valuations, profitability, leverage, and performance vs. BDC peers are detailed in this article.

Founded in 2004, NY-based Prospect Capital (PSEC) provides private debt and private equity to middle-market companies in the United States with a focus on sponsor-backed transactions and direct lending to established owner-operated companies. PSEC invests primarily in first-lien and second-lien senior loans and mezzanine debt, which in some cases include an equity component. It provides capital to middle-market companies and private equity financial sponsors for refinancings, leveraged buyouts, acquisitions, recapitalizations, later-stage growth investments, and capital expenditures.

Source: Seeking Alpha

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