Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, private equity firm Prospect Capital (Nasdaq: PSEC ) has earned a coveted five-star ranking.
With that in mind, let's take a closer look at Prospect's business and see what CAPS investors are saying about the stock right now.
Prospect facts
| Headquarters (Founded) |
New York (1988) |
| Market Cap |
$1 billion |
| Industry |
Asset management |
| Trailing-12-Month Revenue |
$190 million |
| Management |
Chairman/CEO John Francis Barry III
President/COO Michael Eliasek |
| Return on Equity (Average, Past 3 Years) |
7.9% |
| Cash/Debt |
$2 million / $556 million |
| Dividend Yield |
13.3% |
Sources: S&P Capital IQ and Motley Fool CAPS.
On CAPS, 97% of the 660 CAPS members who have rated Prospect believe the stock will outperform the S&P 500 going forward. These bulls include All-Star fooluser17, who is ranked in the top 5% of our community, and cibient.
Just last week, fooluser17 tapped Prospect as a potent income opportunity: "Fantastic dividend, insider buying. ... Don't want to under-diversify, but likely going to make this one an addition to the real portfolio."
Over the past three years, Prospect has grown its top line at a solid rate of 24% annually. Meanwhile, industry peers like American Capital (Nasdaq: ACAS ) , Gladstone Capital (Nasdaq: GLAD ) , and NGP Capital (Nasdaq: NGPC ) sport average revenue declines of -22%, -8%, and -8%, respectively.
CAPS member cibient elaborates on the Prospect bull case:
Voting with insiders -- CEO, CFO, directors have been buying in past few months (and since 2009 as far as I can see). 14% yield. [Business Development Companies] are hard to value and you just don't know what is real -- I read David Einhorn's book Fooling Some of the People All the Time and was amazed at the tomfoolery. But insider buying and dividend payouts are tangible things -- you just hope management is not tricking themselves into thinking everything is rosy.
What do you think about Prospect, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!
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