Prospect is well diversified, with investments in a wide range of industries such as aerospace and defense, electronics, energy, financial services, media, pharmaceuticals, retail, software, etc.
***The company has positive exposure to rising interest rates. In fact, just a 5% increase in rates would increase the company's net investment income by $.30 per share or $109.9 million, according to the company presentation. This is a major plus, as I feel that interest rates will most certainly rise over the coming years.
For these reasons and more, I think Prospect Capital is one of the best monthly dividend paying stocks you can find. I hold shares of this BDC in a Roth IRA account, where the dividends are re-invested and compound every single month.
***I particularly like the second paragraph as it relates to an interest rate increase.
I have not understood the PSEC presentations when the have spoken of the effect of higher interest rates. Do they mean a 5% increase or an increase to 5%. I suspect it is the latter. Also, I am not sure of what interest rates they are talking about. Do they mean LIBOR?. If so, that will be quite an increase.