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PSEC 
Prospect Capital Corporation (PSEC)
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Upturn Advisory Summary
12/11/2025: PSEC (1-star) is currently NOT-A-BUY. Pass it for now.
Upturn Star Rating
Not Recommended Performance
These Stocks/ETFs, based on Upturn Advisory, consistently fall short of market performance, signaling caution before investing.
Number of Analysts
1 Analysts rated it
Very few follow this stock; limited insights, higher-risk early investing.
1 Year Target Price $2.5
1 Year Target Price $2.5
| 0 | Strong Buy |
| 0 | Buy |
| 0 | Hold |
| 0 | Sell |
| 1 | Strong Sell |
Analysis of Past Performance
Type Stock | Historic Profit -34.52% | Avg. Invested days 29 | Today’s Advisory PASS |
Upturn Star Rating | Upturn Advisory Performance  1.0 | Stock Returns Performance  1.0 |
| Profits based on simulation | Last Close 12/11/2025 |
Key Highlights
Company Size Small-Cap Stock | Market Capitalization 1.24B USD | Price to earnings Ratio - | 1Y Target Price 2.5 |
Price to earnings Ratio - | 1Y Target Price 2.5 | ||
Volume (30-day avg) 1 | Beta 0.84 | 52 Weeks Range 2.44 - 3.91 | Updated Date 12/11/2025 |
52 Weeks Range 2.44 - 3.91 | Updated Date 12/11/2025 | ||
Dividends yield (FY) 20.79% | Basic EPS (TTM) -0.88 |
Earnings Date
Report Date - | When - | Estimate - | Actual - |
Profitability
Profit Margin -37.89% | Operating Margin (TTM) 71.71% |
Management Effectiveness
Return on Assets (TTM) 4.13% | Return on Equity (TTM) -5.29% |
Valuation
Trailing PE - | Forward PE - | Enterprise Value 4705792000 | Price to Sales(TTM) 1.83 |
Enterprise Value 4705792000 | Price to Sales(TTM) 1.83 | ||
Enterprise Value to Revenue 14.9 | Enterprise Value to EBITDA 9.42 | Shares Outstanding 470910990 | Shares Floating - |
Shares Outstanding 470910990 | Shares Floating - | ||
Percent Insiders 28.22 | Percent Institutions 18.18 |
Upturn AI SWOT
Prospect Capital Corporation
Company Overview
History and Background
Prospect Capital Corporation (NASDAQ: PSEC) was founded in 2004 and went public in 2007. It is a business development company (BDC) that provides debt and equity capital to middle-market companies. PSEC has evolved to focus on originating and investing in senior secured and unsecured debt, as well as equity investments, often in partnership with private equity sponsors. A significant milestone was its conversion to a REIT (Real Estate Investment Trust) in January 2023, which is expected to provide tax benefits and potentially enhance shareholder returns.
Core Business Areas
- Senior Secured Debt Investments: This is a primary focus, involving direct lending to middle-market companies. Investments typically carry floating interest rates and are secured by the borrower's assets, offering a degree of capital preservation. PSEC aims for a diversified portfolio of these loans.
- Senior Unsecured Debt Investments: These investments are subordinate to senior secured debt but rank above subordinated debt. They generally offer higher yields to compensate for increased risk.
- Equity Investments: PSEC makes opportunistic equity investments, often alongside debt financings, to participate in the upside potential of its portfolio companies. This can include common stock, preferred stock, or warrants.
- Real Estate Investments (as a REIT): Following its conversion to a REIT, Prospect Capital has been strategically acquiring and managing income-producing real estate assets, primarily in the industrial and office sectors. This segment is intended to generate stable rental income and potential capital appreciation.
Leadership and Structure
Prospect Capital Corporation is externally managed by Prospect Capital Management LLC. The company's leadership includes a Board of Directors overseeing its strategic direction and operations, with key executives responsible for investment origination, portfolio management, and financial operations. The external manager provides investment advisory services.
Top Products and Market Share
Key Offerings
- Senior Secured Loans: Prospect Capital Corporation offers direct lending to middle-market companies. These loans are often the primary source of capital for acquisitions, recapitalizations, and growth initiatives for these businesses. Market share data for specific loan products is not publicly disclosed by PSEC, but competitors in direct lending include other BDCs, private debt funds, and traditional lenders. Revenue from this segment is primarily interest income, which has historically been PSEC's largest revenue driver.
- Income-Producing Real Estate: As a REIT, PSEC offers investments in diversified real estate portfolios, primarily industrial and office properties. This segment aims to generate rental income. The broader real estate investment market is vast, and PSEC competes with various real estate investment trusts (REITs), private equity real estate funds, and institutional investors. Revenue from this segment is primarily rental income.
Market Dynamics
Industry Overview
Prospect Capital Corporation operates within the financial services sector, specifically as a business development company (BDC) and a Real Estate Investment Trust (REIT). The BDC industry is influenced by interest rate environments, economic growth, and the availability of credit for middle-market companies. The REIT sector is driven by real estate market fundamentals, including occupancy rates, rental demand, and property values, particularly in the industrial and office sectors.
Positioning
PSEC is positioned as a provider of flexible capital solutions to middle-market companies and a growing participant in real estate investment. Its competitive advantages include its established origination network, its ability to provide a full spectrum of debt and equity financing, and the potential tax efficiencies from its REIT structure. However, as an externally managed BDC, it faces costs associated with its management agreement.
Total Addressable Market (TAM)
The TAM for middle-market lending is estimated to be in the trillions of dollars globally, encompassing private equity-backed companies and independent businesses requiring growth capital. The TAM for income-producing real estate is also substantial, measured in trillions, with significant portions in industrial and office properties. Prospect Capital, as a BDC and a REIT, targets a specific segment within these broad markets. Its positioning is as a direct lender and investor in a niche within the middle market and a diversified investor in select real estate sectors.
Upturn SWOT Analysis
Strengths
- Diversified investment portfolio across debt and equity.
- Experienced external management team with a strong origination network.
- Potential tax benefits and income generation from REIT structure.
- Ability to invest in a wide range of industries and company sizes.
Weaknesses
- External management structure may lead to agency costs.
- Sensitivity to interest rate fluctuations impacting borrowing costs and investment yields.
- Potential for concentration risk in certain portfolio companies or industries.
- Past performance may be volatile due to market cycles.
Opportunities
- Growing demand for private credit from middle-market companies.
- Expansion of real estate portfolio through strategic acquisitions.
- Potential for yield enhancement through opportunistic investments.
- Leveraging the REIT structure for greater tax efficiency and shareholder returns.
Threats
- Economic downturns impacting portfolio company performance and repayment ability.
- Increased competition from other BDCs and private credit funds.
- Rising interest rates increasing borrowing costs for PSEC.
- Regulatory changes affecting BDCs and REITs.
Competitors and Market Share
Key Competitors
- Apollo Investment Corporation (AINV)
- BlackRock Capital Investment Corporation (BKCC)
- Golub Capital BDC, Inc. (GBDC)
- Owl Rock Capital Corporation (ORCC)
Competitive Landscape
Prospect Capital Corporation competes in a crowded market of BDCs and private credit funds. Its advantages include its diversified investment strategy and the potential tax efficiencies of its REIT structure. Disadvantages could include its external management fees and potential for yield compression in a competitive lending environment. Its ability to originate attractive deals and manage risk effectively will determine its success against competitors.
Growth Trajectory and Initiatives
Historical Growth: Historically, Prospect Capital Corporation has grown by originating new debt and equity investments, acquiring stakes in companies, and managing its portfolio to generate income. The company has consistently aimed to deploy capital into new opportunities and expand its investment base. The transition to a REIT marks a significant strategic shift aimed at driving future growth and enhancing shareholder value.
Future Projections: Future growth for Prospect Capital Corporation is projected to come from continued debt originations in the middle market, opportunistic equity investments, and the expansion of its real estate portfolio. Analyst estimates often focus on projected net investment income, dividend growth, and NAV per share appreciation. The success of its REIT strategy will be a critical factor in its future growth trajectory.
Recent Initiatives: The most significant recent initiative is Prospect Capital Corporation's conversion to a Real Estate Investment Trust (REIT) in January 2023. This move is intended to unlock tax benefits and create a more tax-efficient structure for generating and distributing income. The company has also been actively acquiring income-producing real estate assets to complement its existing BDC operations.
Summary
Prospect Capital Corporation is a diversified financial services company operating as a BDC and a REIT. Its strengths lie in its broad investment mandate and recent strategic shift to a REIT structure, offering potential tax advantages. The company needs to carefully manage its debt and equity portfolios to mitigate risks associated with market volatility and economic downturns. Continued successful execution of its real estate acquisition strategy and robust debt origination will be key to its sustained performance.
Similar Stocks
Sources and Disclaimers
Data Sources:
- Prospect Capital Corporation Investor Relations
- SEC Filings (10-K, 10-Q)
- Financial News and Data Providers (e.g., Bloomberg, Refinitiv, Yahoo Finance)
- Industry Reports on BDCs and REITs
Disclaimers:
This JSON output is generated for informational purposes only and does not constitute financial advice. Market share data is an estimation based on industry understanding and publicly available information, and may not be precise. Investors should conduct their own due diligence and consult with a qualified financial advisor before making investment decisions. Past performance is not indicative of future results.
AI Summarization is directionally correct and might not be accurate.
Summarized information shown could be a few years old and not current.
Fundamental Rating based on AI could be based on old data.
AI-generated summaries may have inaccuracies (hallucinations). Please verify the information before taking action.
About Prospect Capital Corporation
Exchange NASDAQ | Headquaters New York, NY, United States | ||
IPO Launch date 2004-07-27 | Chairman of the Board & CEO Mr. John Francis Barry III, J.D. | ||
Sector Financial Services | Industry Asset Management | Full time employees - | |
Full time employees - | |||
Prospect Capital Corporation is a business development company. It specializes in middle market, mature, mezzanine finance, later stage, emerging growth, leveraged buyouts, refinancing, acquisitions, recapitalizations, turnaround, growth capital, development, capital expenditures and subordinated debt tranches of collateralized loan obligations, cash flow term loans, market place lending and bridge transactions. It also makes real estate investments particularly in multi-family residential real estate asset class. The fund makes secured debt, senior debt, senior and secured term loans, unitranche debt, first-lien and second lien, private debt, private equity, mezzanine debt, and equity investments in private and microcap public businesses. It focuses on both primary origination and secondary loans/portfolios and invests in situations like debt financings for private equity sponsors, acquisitions, dividend recapitalizations, growth financings, bridge loans, cash flow term loans, real estate financings/investments. It also focuses on investing in small-sized and medium-sized private companies rather than large public companies. The fund typically invests across all industry sectors, with a particular expertise in the energy and industrial sectors. It invests in aerospace and defense, chemicals, conglomerate services, consumer services, ecological, electronics, financial services, machinery, manufacturing, media, pharmaceuticals, retail, software, specialty minerals, textiles and leather, transportation, oil and gas production, coal production, materials, industrials, consumer discretionary, information technology, utilities, pipeline, storage, power generation and distribution, renewable and clean energy, oilfield services, healthcare, food and beverage, education, business services, and other select sectors. It prefers to invest in the United States and Canada. The fund seeks to invest between $10 million to $500 million per transaction in companies with EBITDA between $5 million and $150 million, sales value betw
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