Dividends4Life: 8% Yield, 12% Discount, Monthly Pay Stock

8% Yield, 12% Discount, Monthly Pay Stock

Posted by D4L | Monday, November 29, 2021 | | 0 comments »

We've covered several Business Development Companies, known as BDCs, in our recent articles. BDCs offer retail investors exposure to privately-held firms, which often also 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.

Founded in 2004, NY-based Prospect Capital provides private debt and private equity to middle-market companies in the US, with a focus on sponsor-backed transactions and direct lending to established owner-operated companies. PSEC yields 8.05%, with strong trailing dividend coverage of 1.33x. It's trading at an -11.7% discount to NAV/share, much lower than the BDC industry average. Management declared steady $.06 monthly dividends through January.

Source: Seeking Alpha

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