Prospect Capital also reduced its monthly cash dividends to shareholders to 8.333 cents a share for February, March, and April 2015. The company will have distributed more than $13.62 a share to original continuing shareholders by April 2015, based on the new reduced dividends.
The asset manager said its loan non-accrual rate stood at 0.03% as of Sept. 30, 2014, a decrease from its rate of 0.32% on Dec. 31, 2013. Prospect Capital's portfolio next leverage fell to 4.14 times EBITDA from 4.49 times EBITDA, while its trailing twelve month first lien origination mix grew to 71.4% from 58.3% in the nine month period.
TheStreet Ratings team rates PROSPECT CAPITAL CORP as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate PROSPECT CAPITAL CORP (PSEC) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins, good cash flow from operations, increase in net income and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 0.8%. Since the same quarter one year prior, revenues rose by 29.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The gross profit margin for PROSPECT CAPITAL CORP is rather high; currently it is at 68.00%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 41.63% significantly outperformed against the industry average.
- Net operating cash flow has significantly increased by 139.68% to $97.41 million when compared to the same quarter last year. In addition, PROSPECT CAPITAL CORP has also vastly surpassed the industry average cash flow growth rate of -175.12%.
- PROSPECT CAPITAL CORP's earnings per share declined by 22.6% in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. We anticipate these figures will begin to experience more growth in the coming year. During the past fiscal year, PROSPECT CAPITAL CORP increased its bottom line by earning $1.08 versus $1.07 in the prior year. This year, the market expects an improvement in earnings ($1.10 versus $1.08).
- The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Capital Markets industry average, but is greater than that of the S&P 500. The net income increased by 5.3% when compared to the same quarter one year prior, going from $79.90 million to $84.11 million.
- You can view the full analysis from the report here: PSEC Ratings Report