PROSPECT CAPITAL CORP (PSEC) Stock Fundamental Analysis
NASDAQ:PSEC - Nasdaq - US74348T1025 - Common Stock - Currency: USD
Taking everything into account, PSEC scores 3 out of 10 in our fundamental rating. PSEC was compared to 231 industry peers in the Capital Markets industry. While PSEC is still in line with the averages on profitability rating, there are concerns on its financial health. PSEC has a valuation in line with the averages, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
In the past year PSEC was profitable.
In the past year PSEC had a positive cash flow from operations.
In multiple years PSEC reported negative net income over the last 5 years.
The reported operating cash flow has been mixed in the past 5 years: PSEC reported negative operating cash flow in multiple years.
1.2 Ratios
PSEC has a worse Return On Assets (-1.26%) than 78.36% of its industry peers.
PSEC has a worse Return On Equity (-1.80%) than 76.62% of its industry peers.
Looking at the Return On Invested Capital, with a value of 4.14%, PSEC is in line with its industry, outperforming 56.28% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for PSEC is below the industry average of 7.24%.
The 3 year average ROIC (4.06%) for PSEC is below the current ROIC(4.14%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -1.26% | ||
| ROE | -1.8% | ||
| ROIC | 4.14% |
ROA(3y)2.32%
ROA(5y)4.38%
ROE(3y)3.67%
ROE(5y)6.97%
ROIC(3y)4.06%
ROIC(5y)3.98%
1.3 Margins
In the last couple of years the Profit Margin of PSEC has declined.
PSEC has a Operating Margin of 46.92%. This is amongst the best in the industry. PSEC outperforms 83.12% of its industry peers.
PSEC's Operating Margin has improved in the last couple of years.
The Gross Margin of PSEC (52.94%) is better than 61.04% of its industry peers.
PSEC's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 46.92% | ||
| PM (TTM) | N/A | ||
| GM | 52.94% |
OM growth 3Y2.53%
OM growth 5Y1.85%
PM growth 3Y-51.74%
PM growth 5Y-3.58%
GM growth 3Y2.62%
GM growth 5Y1.89%
2. Health
2.1 Basic Checks
PSEC has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, PSEC has more shares outstanding
Compared to 1 year ago, PSEC has an improved debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 0.53, we must say that PSEC is in the distress zone and has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 0.53, PSEC is doing worse than 63.20% of the companies in the same industry.
PSEC has a debt to FCF ratio of 3.69. This is a good value and a sign of high solvency as PSEC would need 3.69 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 3.69, PSEC is doing good in the industry, outperforming 71.43% of the companies in the same industry.
A Debt/Equity ratio of 0.41 indicates that PSEC is not too dependend on debt financing.
With a decent Debt to Equity ratio value of 0.41, PSEC is doing good in the industry, outperforming 72.29% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.41 | ||
| Debt/FCF | 3.69 | ||
| Altman-Z | 0.53 |
ROIC/WACCN/A
WACCN/A
2.3 Liquidity
PSEC has a Current Ratio of 0.59. This is a bad value and indicates that PSEC is not financially healthy enough and could expect problems in meeting its short term obligations.
PSEC's Current ratio of 0.59 is on the low side compared to the rest of the industry. PSEC is outperformed by 71.86% of its industry peers.
A Quick Ratio of 0.59 indicates that PSEC may have some problems paying its short term obligations.
PSEC has a Quick ratio of 0.59. This is in the lower half of the industry: PSEC underperforms 71.86% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.59 | ||
| Quick Ratio | 0.59 |
3. Growth
3.1 Past
The earnings per share for PSEC have decreased strongly by -21.00% in the last year.
Measured over the past 5 years, PSEC shows a small growth in Earnings Per Share. The EPS has been growing by 2.68% on average per year.
Looking at the last year, PSEC shows a small growth in Revenue. The Revenue has grown by 1.11% in the last year.
The Revenue has been growing slightly by 4.13% on average over the past years.
EPS 1Y (TTM)-21%
EPS 3Y9.44%
EPS 5Y2.68%
EPS Q2Q%-43.48%
Revenue 1Y (TTM)1.11%
Revenue growth 3Y10.89%
Revenue growth 5Y4.13%
Sales Q2Q%-15.58%
3.2 Future
PSEC is expected to show a very negative growth in Earnings Per Share. In the coming years, the EPS will decrease by -23.25% yearly.
The Revenue is expected to decrease by -10.61% on average over the next years. This is quite bad
EPS Next Y-41.11%
EPS Next 2Y-29.7%
EPS Next 3Y-23.25%
EPS Next 5YN/A
Revenue Next Year-15.84%
Revenue Next 2Y-13.61%
Revenue Next 3Y-10.61%
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 4.30 indicates a rather cheap valuation of PSEC.
PSEC's Price/Earnings ratio is rather cheap when compared to the industry. PSEC is cheaper than 96.10% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.35, PSEC is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 7.09, the valuation of PSEC can be described as very cheap.
Compared to the rest of the industry, the Price/Forward Earnings ratio of PSEC indicates a rather cheap valuation: PSEC is cheaper than 90.04% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of PSEC to the average of the S&P500 Index (22.20), we can say PSEC is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 4.3 | ||
| Fwd PE | 7.09 |
4.2 Price Multiples
Compared to the rest of the industry, the Price/Free Cash Flow ratio of PSEC indicates a rather cheap valuation: PSEC is cheaper than 89.18% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 2.75 | ||
| EV/EBITDA | N/A |
4.3 Compensation for Growth
A cheap valuation may be justified as PSEC's earnings are expected to decrease with -23.25% in the coming years.
PEG (NY)N/A
PEG (5Y)1.61
EPS Next 2Y-29.7%
EPS Next 3Y-23.25%
5. Dividend
5.1 Amount
PSEC has a Yearly Dividend Yield of 14.63%, which is a nice return.
The stock price of PSEC dropped by -22.73% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.
Compared to an average industry Dividend Yield of 8.18, PSEC pays a better dividend. On top of this PSEC pays more dividend than 90.91% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.40, PSEC pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 14.63% |
5.2 History
The dividend of PSEC has a limited annual growth rate of 5.35%.
PSEC has paid a dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)5.35%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
The earnings of PSEC are negative and hence is the payout ratio. PSEC will probably not be able to sustain this dividend level.
DP-404.93%
EPS Next 2Y-29.7%
EPS Next 3Y-23.25%
3.4
+0.06 (+1.8%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryCapital Markets
Earnings (Last)
Earnings (Next)
Inst Owners10.79%
Inst Owner Change29.01%
Ins Owners18.55%
Ins Owner Change4.11%
Market Cap1.54B
Analysts40
Price Target3.57 (5%)
Short Float %7.3%
Short Ratio7.35
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 14.63% |
Yearly Dividend0.87
Dividend Growth(5Y)5.35%
DP-404.93%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)30.58%
Min EPS beat(2)21.11%
Max EPS beat(2)40.06%
EPS beat(4)4
Avg EPS beat(4)27.52%
Min EPS beat(4)12.75%
Max EPS beat(4)40.06%
EPS beat(8)8
Avg EPS beat(8)20.9%
EPS beat(12)12
Avg EPS beat(12)19.72%
EPS beat(16)16
Avg EPS beat(16)18.35%
Revenue beat(2)0
Avg Revenue beat(2)-5.07%
Min Revenue beat(2)-6.01%
Max Revenue beat(2)-4.14%
Revenue beat(4)1
Avg Revenue beat(4)-4.07%
Min Revenue beat(4)-7.33%
Max Revenue beat(4)1.21%
Revenue beat(8)3
Avg Revenue beat(8)-9.72%
Revenue beat(12)6
Avg Revenue beat(12)-5.57%
Revenue beat(16)9
Avg Revenue beat(16)-3.76%
PT rev (1m)-12.5%
PT rev (3m)-12.5%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0%
EPS NY rev (1m)0%
EPS NY rev (3m)0%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)-1.08%
Revenue NY rev (3m)-1.08%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 4.3 | ||
| Fwd PE | 7.09 | ||
| P/S | 1.93 | ||
| P/FCF | 2.75 | ||
| P/OCF | 2.75 | ||
| P/B | 0.3 | ||
| P/tB | 0.3 | ||
| EV/EBITDA | N/A |
EPS(TTM)0.79
EY23.24%
EPS(NY)0.48
Fwd EY14.1%
FCF(TTM)1.24
FCFY36.33%
OCF(TTM)1.24
OCFY36.33%
SpS1.76
BVpS11.23
TBVpS11.23
PEG (NY)N/A
PEG (5Y)1.61
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -1.26% | ||
| ROE | -1.8% | ||
| ROCE | 5.24% | ||
| ROIC | 4.14% | ||
| ROICexc | 4.18% | ||
| ROICexgc | 4.18% | ||
| OM | 46.92% | ||
| PM (TTM) | N/A | ||
| GM | 52.94% | ||
| FCFM | 70.04% |
ROA(3y)2.32%
ROA(5y)4.38%
ROE(3y)3.67%
ROE(5y)6.97%
ROIC(3y)4.06%
ROIC(5y)3.98%
ROICexc(3y)4.1%
ROICexc(5y)4.01%
ROICexgc(3y)4.1%
ROICexgc(5y)4.01%
ROCE(3y)5.14%
ROCE(5y)5.03%
ROICexcg growth 3Y5.53%
ROICexcg growth 5Y-0.41%
ROICexc growth 3Y5.53%
ROICexc growth 5Y-0.41%
OM growth 3Y2.53%
OM growth 5Y1.85%
PM growth 3Y-51.74%
PM growth 5Y-3.58%
GM growth 3Y2.62%
GM growth 5Y1.89%
F-Score3
Asset Turnover0.11
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.41 | ||
| Debt/FCF | 3.69 | ||
| Debt/EBITDA | N/A | ||
| Cap/Depr | N/A | ||
| Cap/Sales | N/A | ||
| Interest Coverage | 2.56 | ||
| Cash Conversion | N/A | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.59 | ||
| Quick Ratio | 0.59 | ||
| Altman-Z | 0.53 |
F-Score3
WACCN/A
ROIC/WACCN/A
Cap/Depr(3y)N/A
Cap/Depr(5y)N/A
Cap/Sales(3y)N/A
Cap/Sales(5y)N/A
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-21%
EPS 3Y9.44%
EPS 5Y2.68%
EPS Q2Q%-43.48%
EPS Next Y-41.11%
EPS Next 2Y-29.7%
EPS Next 3Y-23.25%
EPS Next 5YN/A
Revenue 1Y (TTM)1.11%
Revenue growth 3Y10.89%
Revenue growth 5Y4.13%
Sales Q2Q%-15.58%
Revenue Next Year-15.84%
Revenue Next 2Y-13.61%
Revenue Next 3Y-10.61%
Revenue Next 5YN/A
EBIT growth 1Y-14.59%
EBIT growth 3Y13.69%
EBIT growth 5Y6.06%
EBIT Next YearN/A
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y180.7%
FCF growth 3Y108.25%
FCF growth 5Y4.58%
OCF growth 1Y180.7%
OCF growth 3Y108.25%
OCF growth 5Y4.58%