psec stock: Prospect Capital Investor Guide

PSEC (Prospect Capital Corporation) — Stock

Short lead: This article explains psec stock — the Nasdaq-listed common stock for Prospect Capital Corporation — and provides a beginner-friendly but detailed reference covering the company's profile, business model, portfolio, financial performance, dividend policy, risks, governance, and where investors can find verified market data.

Company overview

psec stock represents common equity in Prospect Capital Corporation, a publicly traded business development company (BDC) structured to invest primarily in middle-market private companies. Prospect Capital originates and manages direct lending, mezzanine debt, and equity investments, typically focusing on U.S. and North American enterprises that require customized financing solutions. Founded in the early 2000s and headquartered in New York City, the firm's mission centers on generating current income and long-term capital appreciation for shareholders consistent with the BDC regulatory framework.

Corporate history and development

• Founding and early years: Prospect Capital launched to provide private capital solutions to middle-market companies, leveraging a team with experience in direct lending and private equity.
• Public listing: Prospect Capital completed a public listing and operates as a closed-end BDC with publicly traded common stock (psec stock) on Nasdaq.
• Strategic events: Over time, Prospect expanded its origination platform, pursued selective acquisitions of loan portfolios or related assets, and adjusted its capital structure to respond to market cycles.
• Regulatory and market milestones: As a BDC, Prospect has complied with the Investment Company Act exemptions that govern BDCs, regularly filing SEC disclosure documents that reflect portfolio composition, leverage levels, and distribution policies.

Business model and investment strategy

Prospect Capital’s business model is typical of direct-lending BDCs: it raises capital from public markets and private investors, invests primarily in privately negotiated debt instruments and select equity stakes in middle-market companies, and seeks to distribute a large portion of taxable income to shareholders.

• Types of investments: First- and second-lien senior secured loans, unitranche and mezzanine debt, subordinated debt, warrants, and minority equity positions.
• Target company profile: Middle-market firms with stable cash flows, proven management, and financing needs not fully served by traditional banks. Industry focus can be broad but often includes industrial services, healthcare, business services, and niche manufacturing.
• Deal size and geography: Typical investments are sized to meet the capital needs of mid-sized firms—deal sizes vary but commonly range from several million to hundreds of millions—primarily concentrated in North America.
• Portfolio construction and risk management: Prospect uses underwriting, covenants, monitoring, and, where appropriate, co-investment structures to manage credit risk. The firm may use leverage prudently under BDC rules and may access debt markets, securitizations, or credit facilities to complement equity capital.
• BDC regulatory framework: As a BDC, Prospect must meet diversification and asset eligibility requirements under U.S. securities law, distribute most taxable income to shareholders to maintain pass-through tax characteristics, and disclose portfolio-level data on a regular basis.

Operations and portfolio

Prospect’s portfolio is typically a mix of debt and equity exposures where debt instruments often predominate. The portfolio composition will vary over time as new investments are deployed and older positions mature or are realized.

• Debt vs equity weightings: Historically, BDCs like Prospect hold a majority of assets in debt instruments with equity stakes representing a smaller but value-enhancing portion of portfolio returns.
• Sector exposures: The portfolio may be diversified across several sectors, though concentration can occur based on opportunity sets and origination focus.
• Notable holdings: Prospect periodically discloses top portfolio companies or significant investments in quarterly filing summaries; these examples illustrate the mix of senior secured loans, mezzanine debt, and equity participations.
• Underwriting and monitoring: The firm conducts credit analysis, covenant structuring, and ongoing portfolio surveillance; workout teams handle stressed credits.
• Leverage and structured financing: Prospect may employ leverage via secured borrowings, notes, and securitization transactions consistent with BDC rules and its board-approved policies.

Financial performance

This section summarizes the types of financial measures investors typically review for a BDC like Prospect; readers should consult the latest SEC filings and market pages for current numbers.

• Revenue and income: Key components include interest income from loans, fees from underwriting or servicing, realized gains/losses from sales, and management expenses.
• Net investment income (NII) and dividends: For BDCs, NII is a central metric that relates to dividend coverage; Prospect historically aims to pay regular distributions from cash flow and available capital.
• Assets under management (AUM) / total investments: SEC filings and the company’s investor reports show the aggregate fair value of investments and AUM.
• EPS, NAV and return metrics: Earnings per share (EPS) and net asset value (NAV) per share (if provided) help investors evaluate valuation and performance relative to net assets.

As of 2026-01-24, according to Nasdaq and company SEC filings, investors should reference the most recent 10-Q or 10-K for quarter- or year-end figures for revenue, NII, and portfolio valuations. These filings provide verifiable and auditable numbers.

Stock information

• Ticker and exchange: psec stock trades under the ticker PSEC on the Nasdaq exchange.
• Market capitalization, shares outstanding and float: Market cap and shares outstanding change daily; check the latest market-data pages for current values. As of 2026-01-24, investors can view up-to-date figures on Nasdaq and major financial data providers.
• Average daily volume and liquidity: PSEC typically has measurable daily trading volume, enabling retail and institutional participation, though liquidity can vary with market conditions.
• Sector/industry classification: Financials — investment management / business development company.

Price history and market performance

• Historical performance: psec stock has historically shown sensitivity to interest-rate cycles, credit conditions, and BDC-sector sentiment. Long-term charts illustrate periods of compressed valuation during credit stress and rebounds when credit spreads tighten.
• 52-week range and multi-year trends: Check live charts for the latest 52-week high/low and historic price performance. Data providers like Yahoo Finance, MarketWatch, Macrotrends, and TradingView offer historical series and charts.
• Sources for charts: Investors commonly consult Nasdaq, Yahoo Finance, TradingView, MarketWatch, and Macrotrends for charting and technical overlays.

Dividend policy and yield

• BDC distribution framework: Business development companies typically distribute most taxable income to shareholders. Prospect’s dividend policy reflects this framework and is disclosed in dividend notices and investor presentations.
• Frequency and mechanics: Prospect commonly pays dividends on a quarterly or monthly schedule depending on its declared payout cadence; check the company’s investor relations page and recent press releases for the declared rates and ex-dividend dates.
• Indicated yield: Dividend yield for psec stock is computed as the most recent annualized distribution divided by market price. Yields for BDCs can be materially higher than broad-market averages due to the income-oriented strategy and use of leverage.
• Sustainability factors: Dividend sustainability depends on underlying NII, realized gains/losses, portfolio credit performance, leverage costs, and capital-raising ability. The company’s SEC filings and earnings commentary provide coverage metrics and management discussion relevant to payout sustainability.

Ownership, institutional holdings and short interest

• Institutional holders: Major institutional shareholders frequently hold significant positions in BDCs for yield exposure; public filings and market-data platforms list institutional ownership percentages and changes.
• Insider ownership and activity: Insider holdings and recent transactions by executives or directors are reported on SEC forms and can provide signaling about management alignment with shareholders.
• Short interest: Short-interest levels on psec stock reflect bearish sentiment or hedging activity; data providers publish short-interest counts and ratios that investors use to gauge sentiment and potential short-covering dynamics.

As of 2026-01-24, investors should consult SEC forms and market-data providers to verify current institutional ownership and short-interest snapshots.

Analyst coverage and market consensus

• Analyst ratings and targets: A subset of sell-side analysts and independent research firms publish coverage of psec stock, including ratings, price targets, and dividend commentary. Coverage for BDCs often focuses on NAV relative to price, yield sustainability, and credit metrics.
• Common valuation approaches: Analysts typically use NAV-based comparisons, earnings or NII yield analysis, yield-on-price metrics, and scenario modeling of loan performance and recoveries to value BDCs.
• Consensus interpretation: Where consensus exists, it reflects a range of views on dividend sustainability, portfolio credit risk, and the likely multiple investors place on NAV or NII streams.

Risk factors and considerations for investors

Investors considering psec stock should be aware of principal risks that commonly affect BDCs and direct lenders:

• Credit and default risk: The most significant risk is borrower defaults and non-performing loans, which reduce interest income and may result in principal losses.
• Interest-rate sensitivity: Rising short-term rates increase borrowing costs for leveraged BDCs and can compress net interest margins if asset yields reset more slowly than liability costs.
• Leverage and liquidity risk: Use of borrowed capital amplifies returns and losses. Access to debt markets can tighten during stress periods, potentially forcing asset sales or dividend reductions.
• Concentration risk: Large exposures to a single borrower, sponsor, or industry can increase portfolio volatility.
• Regulatory and tax considerations: As a BDC, Prospect must comply with rules that affect permissibility of investments, leverage caps, and distribution requirements.
• Market sentiment and valuation risk: BDCs can trade at discounts to NAV, and market perception about credit cycles and rate paths can materially affect psec stock price.

This is not an exhaustive list. For a comprehensive view, review the company’s risk disclosures in its 10-K and recent 10-Q filings.

Corporate governance and management

• Executive leadership: The company’s CEO, CFO, and senior investment officers set underwriting standards, portfolio strategy, and capital allocation. Management biographies and backgrounds are available in the company’s proxy statements and investor materials.
• Board of directors: Governance practices include board composition, independent director representation, committee structures (audit, compensation, nominating), and policies on related-party transactions.
• Compensation and alignment: Executive compensation structures often blend base pay, performance incentives, and equity-based components to align management with long-term shareholder returns.
• Notable governance items: Any shareholder proposals, board changes, or governance controversies are disclosed in proxy statements and 8-K filings and can influence investor perceptions of stewardship.

SEC filings, reporting and regulatory matters

Investors should regularly consult these filings for verified information:

• Form 10-K: Annual report with audited financial statements and comprehensive risk disclosures.
• Form 10-Q: Quarterly updates with current financials and portfolio data.
• Form 8-K: Material event notices such as earnings releases, material investments, management changes, or dividend declarations.
• Proxy statements (DEF 14A): Governance, executive compensation, and shareholder meeting proposals.

As of 2026-01-24, the most recent 10-Q or 10-K on the SEC’s EDGAR system and the company’s investor relations page are the authoritative sources for quantitative metrics and material disclosures.

Trading mechanics and derivatives

• Trading hours: psec stock trades during Nasdaq regular market hours; pre-market and after-hours sessions may offer additional liquidity.
• Options markets: Investors may find listed options on PSEC where available; options volume and open interest vary and are useful for hedging or income strategies. Check options data providers for availability and activity levels.
• Liquidity considerations: For large block trades, bidders should be mindful of bid-ask spreads and market depth; institutional brokers or execution algorithms can assist with trade execution to limit market impact.

Comparative peers and sector context

Direct-lending BDC peers and alternative vehicles include other business development companies and closed-end credit funds. When comparing psec stock to peers, investors commonly look at yield, NAV premium/discount, asset quality metrics, leverage ratios, and total asset size.

• Comparison points: Dividend yield vs. peers, coverage ratios (NII to distributions), non-performing asset levels, and portfolio diversification.
• Strategic differences: Some peers emphasize senior secured lending while others have higher equity exposure or focus on different borrower profiles.

Recent news and developments

• Earnings and dividend notices: Quarterly earnings reports and dividend declarations are primary drivers of short-term price action for psec stock.
• Material investments and credit events: Large new investments, loan workouts, or realized losses can change reported portfolio metrics.
• Market commentary: Coverage by financial news outlets and analyst reports can influence sentiment.

As of 2026-01-24, according to company filings and market-data providers, investors should review the latest earnings release and 8-K notices for specific recent developments that may affect psec stock.

Research and data sources

For up-to-date and verifiable data on psec stock, use these primary sources and market-data platforms:

• Company investor relations page and press releases (for dividends, corporate actions, and presentations).
• SEC EDGAR filings (10-K, 10-Q, 8-K, proxy statements).
• Nasdaq company page and real-time quotes.
• Market-data aggregators such as Yahoo Finance, MarketWatch, TradingView and Macrotrends for charts, historical pricing and volume metrics.
• Brokerage research and independent BDC research reports for analyst commentary.

See also

• Business Development Company (BDC) overview
• Closed-end funds and income-oriented investment vehicles
• Investor guides on dividend investing and credit risk

References and external links

Sources used for preparing this guide include the company’s investor documents and public market-data providers: Prospect Capital Corporation investor relations, SEC EDGAR filings, Nasdaq, Yahoo Finance, Robinhood market pages, Macrotrends, MarketWatch, TradingView, and Quartz Markets. For the most current price, market cap and volume, consult the listed primary sources.

Further exploration: If you want a concise investor fact sheet (key metrics and latest figures) or a one-page summary with live quotes for psec stock, I can assemble that using the latest public-data snapshots from Nasdaq and company filings.