Better Buy: Prospect Capital vs. Realty Income

We've collected the most popular companies amongst Fool.com readers and put them head-to-head in a good old-fashioned challenge we're calling The Motley Fool Better Buy Tournament.

Mar 24, 2014 at 12:24PM

In today's match-up of The Motley Fool Better-Buy Tournament, Realty Income squares off against Prospect Capital in a battle to determine which stock is the better buy now. The 64-company tournament pits two Motley Fool analysts against each as they make the case for their stocks, with the winner determined by you, the readers.

Motley Fool Financials analyst David Hanson believes Prospect Capital (NASDAQ:PSEC) should move on to the next round because of the company's larger investment portfolio which has excellent credit quality. Prospect Capital's BDC structure allows it to pass earnings through to shareholders, which results in a big dividend yield. Finally, David sees Prospect's large size and scale as a big advantage when it comes to finding new investments and getting favorable prices. 

Any company that boldly labels itself as "the monthly dividend company," will always pique the interest of many investors looking for income, but it turns out Realty Income (NYSE:O) should be considered by all. The reality that it has increased its dividend for 66 consecutive quarters is eye-opening and appealing, but so too is the fact that its ever-important adjusted funds from operations rose by 17% last year. Throw in a diverse revenue stream from a variety of businesses and a great management team, and there is no denying "the monthly dividend company" is your best buy for March.

Watch these analysts square off in the video below and then vote for a winner. Then check out the other companies in the Motley Fool Better-Buy Bracket

This year's winning stock?
There's a huge difference between a good stock and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.

Cast your vote in the poll below the video!

David Hanson has no position in any stocks mentioned. Patrick Morris has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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