Prospect Capital Corporation’s (NASDAQ:PSEC) fourth-quarter fiscal 2019 (ended Jun 30) net investment income of 19 cents per share missed the Zacks Consensus Estimate by a penny. Also, the bottom line decreased 13.6% year over year.
Results were adversely impacted by lower revenues and a slight rise in expenses. Also, decline in value of investment portfolio was an undermining factor.
Net investment income for the reported quarter came in at $69.6 million, down 12.4% from the prior-year quarter.
For fiscal 2019, net investment income was $312.9 million or 85 cents per share, up from $286.9 million or 79 cents per share in fiscal 2018.
Total Investment Income Down, Expenses Rise
Total investment income for the quarter was $164.4 million, down 5.6% year over year. The fall was mainly due to lower dividend income and interest income. Also, the figure lagged the Zacks Consensus Estimate of $166.7 million.
Total investment income for fiscal 2019 grew 7% year over year to $703.8 million. However, it missed the consensus estimate of $706.1 million.
Total operating expenses increased marginally to $94.7 million.
Total Portfolio Value & Originations
The fair value of Prospect Capital’s total investment portfolio was $5.66 billion as of Jun 30, 2019, down 1.3% year over year.
In the reported quarter, the company originated $187.9 million in new and follow-on investments.
Balance Sheet
As of Jun 30, 2019, Prospect Capital’s net asset value was $9.01 per share compared with $9.35 on Jun 30, 2018. Further, the company held $4.12 billion of unencumbered assets as on the same date.
At the end of the quarter, net of cash debt to equity ratio was 70%, up from 66.5% as of Jun 30, 2018.
Our Take
Prospect Capital’s loan origination activity continues to be on track and it strategically deploys its capital while maintaining a balanced and diversified approach across various industries and sectors. However, elevated expense levels are expected to hurt the bottom line to some extent.
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
Ares Capital Corporation’s (NASDAQ:ARCC) second-quarter 2019 core earnings of 49 cents per share surpassed the Zacks Consensus Estimate of 44 cents. Also, the bottom line grew 25.6% from the year-ago quarter.
Hercules Capital Inc.’s (NYSE:HTGC) second-quarter 2019 net investment income of 36 cents per share outpaced the Zacks Consensus Estimate of 33 cents. The bottom line also was 38.5% above the year-ago figure.
Capitala Finance Corp.’s (NASDAQ:CPTA) second-quarter 2019 net investment income per share of 25 cents was in line with the Zacks Consensus Estimate. The figure was 3.8% lower than the prior-year quarter’s number.
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Prospect Capital Corporation (PSEC): Free Stock Analysis Report
Hercules Capital, Inc. (HTGC): Free Stock Analysis Report
Ares Capital Corporation (ARCC): Free Stock Analysis Report
Capitala Finance Corp. (CPTA): Free Stock Analysis Report
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