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Prospect Capital (PSEC) Q4 Earnings Improve Y/Y, Costs Down

Higher total investment income and decline in expenses, along with solid origination volumes, support Prospect Capital's (PSEC) fiscal Q4 results.

This story originally appeared on Zacks

Prospect Capital’s PSEC fourth-quarter fiscal 2021 (ended Jun 30) net investment income of 19 cents per share was up 18.8% year over year. The bottom line matched the Zacks Consensus Estimate.

Results were aided by a rise in total investment income and lower expenses. Further, overall portfolio activity remained decent in the reported quarter with strong originations.

Net investment income came in at $73.2 million, up 25.7% from the prior-year quarter.

In fiscal 2021, net investment income was $285.7 million or 75 cents per share, up from $265.7 million or 72 cents per share a year ago.

- Zacks

Total Investment Income Climbs, Expenses Down

Total investment income was $157.3 million, up 8.3% year over year. The rise resulted from higher interest income, dividend income and other income.

In fiscal 2021, total investment income grew 1.4% to $632 million.

Total operating expenses declined 3.3% from the prior-year quarter to $84.1 million.

Total Portfolio Value & Originations Decent

The fair value of Prospect Capital’s total investment portfolio was $6.2 billion as of Jun 30, 2021, up 18.5% from the previous-year quarter.

In the reported quarter, the company recorded $306.8 million of total originations, while repayments were $156.3 million.

Strong Balance-Sheet Position

As of Jun 30, 2021, Prospect Capital’s net asset value was $9.81 per share compared with $8.18 on Jun 30, 2020. The company had $4.5 billion of unencumbered assets as of the same date.

At the end of the reported quarter, net of cash debt to equity ratio was 55.9%, down from 69.6% as of Jun 30, 2020.

Our Take

Solid loan origination activity continues to be on track and this is expected to support Prospect Capital’s financials.


Currently, Prospect Capital carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


Performance of Other Finance Stocks

Hercules Capital Inc.’s HTGC second-quarter 2021 net investment income of 32 cents per share was in line with the Zacks Consensus Estimate. The figure indicates no change from the year-ago quarter’s reported number.

Ares Capital Corporation’s ARCC second-quarter 2021 core earnings of 53 cents per share surpassed the Zacks Consensus Estimate of 43 cents. Moreover, the bottom line reflects a rise of 35.9% from the prior-year quarter’s reported number.

FS KKR Capital Corp.’s FSK second-quarter 2021 adjusted net investment income per share of 74 cents surpassed the Zacks Consensus Estimate of 61 cents. In the prior-year quarter, the company reported earnings of 62 cents. The reported quarter’s results exclude accretion resulting from the merger with FS KKR Capital Corp. II.

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Ares Capital Corporation (ARCC): Free Stock Analysis Report


Hercules Capital, Inc. (HTGC): Free Stock Analysis Report


Prospect Capital Corporation (PSEC): Free Stock Analysis Report


FS KKR Capital Corp. (FSK): Free Stock Analysis Report


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