Invest in Prospect Capital Corporation's High Dividend

Where can you earn 17% dividend on a US based company? At Prospect Capital Corporation (PSEC). The upcoming dividend is .40625, which is a 16.89% yield at $10.17 share price which will ex-dividend on July 6th 2009. This dividend is the same amount that is had paid out for the prior 4 quarters.

It earns its dividends from investing into companies needing capital. What I like about this company is that the firm has expertise in energy and industrial sectors. It wisely invests in oil and gas, coal, materials, industrials, information technology, utilities, pipeline, storage, power generation, renewable and clean energy, and other types. Energy, materials, and technology are three candidates that have great potential for high ROI, as well as dividend payback.

Insiders are agreeing with me, as insider buying has been regular and intensive. Insider buying is just a clue - but a good one.

Prospect Capital has raised capital recently. It announced it has raised $64 million in gross proceeds from its public offering of roughly 7.8 million shares of common stock. Those shares were priced at $8.25 and investors are probably believing that the newly raised capital will be invested in more companies, that is in demand in this tight economy by companies of all types. This quarter's dividend is a repeat of the priors, the next quarter dividend could go down due to share dilution.

See this Yahoo Finance chart for more information about previous dividends and stock price movement.

We see stock appreciation over the long term, when the US & Canada economy picks back up in 2010 and 2011. In the mean time, why not earn a really nice dividend? Examine the chart closely and potentially buy on the dips. The chart shows a share price drop after each dividend payout.

Disclosure: Long

Comments

[whisperonth...:]

I could be wrong, and I will have to do more research on the company before investing in it, but Google Finance is showing that the dividends have increased every single quarter since it started giving them. Those increases have been small recently, due to the economy most likely, but they are still increasing them. This puts it up a shade higher in my likely prospects list. Thanks.

Jun 28 08:31 AM

[YoYoMama:]

Amazing and correct. Increase each divy payout. Not a great chart, highs are not higher, but lows are higher. It's on the high side now, I'd wait for a pullback.

Jun 28 08:45 AM

[tresspass:]

The share of virtually every stock on payout day ids universal.There's no dilution that day; there's no stoning of the CEO that day and there is nothing that's changed that day except that PSEC's cash on hand is less than it was the day before but we and the street knew that; everyone knew that.You intentionally invest in high yielding companies knowing this going in and knowing that a good mgt.. team is well aware of their cash position now, and going in to the next quarter.
Tresspass

Jun 28 08:47 AM

[tresspass:]

I doubt if any meaningful pull back is going to happen. I'd be looking at these levels now before you lose out on the next whopping dividend.

There are no major gaps to be filled---which history tells you is only about 50% true and only on 15 to 30% gap ups.Friday's late PM's action is an indicator someone is accumulating large. It;s been stair casing up recently, sustaining a higher base with each step.


On Jun 28 08:45 AM YoYoMama wrote:

> Amazing and correct. Increase each divy payout. Not a great chart,
> highs are not higher, but lows are higher. It's on the high side
> now, I'd wait for a pullback.

Jun 28 08:55 AM

[whisperonth...:]

Today is a good day to start researching. For those that have been through a previous crunch, I like to see how they survived it, and who helped, as well as where the ended up in the year or two after the lowest points. Every day is different, but sometimes the years look the same no matter what.

Jun 28 09:05 AM

[mdpath:]

The stock is up almost 25% since its recent public offering.

Jun 28 11:42 AM

[Philip Obal:]

One really has to UNDERSTAND which companies that this company is investing in and see if you are confident that these companies are solid, growing, and can continue to contribute to the high dividend that PSEC is paying. ANOTHER way to play PSEC is to catch the ups and downs of it - about a 25% variance each quarter. Also - With the additional shares now... we will have to wait and see about NEXT quarter's dividend (staying the same or slight decrease).

Jun 28 03:34 PM

[seven42:]

just a cautionary not as i actually met management (cfo, coo, not the ceo) a while back. if they are still there, most of the guys i met were shady, especially the coo. he was rude, aggressive, and would sell out his mother if he could. i would look into the company's control system.

Jun 28 11:46 PM