Prospect Capital Corporation PSEC appears to be a profitable investment option, driven by steady earnings growth and solid prospects. Also, strong economic growth is expected to support the top line.
Prospect Capital is also witnessing upward estimate revisions, reflecting analysts’ optimism about its growth prospects. Over the past 60 days, the Zacks Consensus Estimate for fiscal 2019 and fiscal 2020 has been raised 11.8% and 11.6%, respectively.
Further, this Zacks Rank #2 (Buy) stock has lost 3.7% year to date against the industry’s decline of 28.6%. Nevertheless, given the upward estimate revisions and a solid Zacks Rank, the stock is expected to gain in the future.
What Makes Prospect Capital a Solid Investment Option?
Earnings growth: In the last three to five years, Prospect Capital witnessed earnings decline of 10%. Nonetheless, the earnings growth rate for fiscal 2019 and fiscal 2020 is anticipated to be 20.3% and 1.1%, respectively, ensuring continued momentum.
Also, Prospect Capital has a decent earnings surprise history. The bank has an average trailing four-quarter positive earnings surprise of 9.1%.
Revenue strength: Prospect Capital has been witnessing consistent improvement in revenues for the past few years. Over the last six fiscal years (2013-2018), the company’s revenues witnessed a CAGR of 2.7%. Further, its top line is expected to grow 14.9% in fiscal 2019 and 3.3% in fiscal 2020.
Stock looks undervalued: Prospect Capital seems undervalued compared with the industry. The company’s P/E and P/B ratios of 6.83 and 0.69 are lower than the industry average of 10.17 and 1.36, respectively.
Other Stocks Worth Considering
The Zacks Consensus Estimate for Credit Acceptance Corporation CACC earnings for fourth-quarter 2018 has remained stable in the past 30 days. Also, its share price has increased 17% year to date. The stock carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Amalgamated Bank AMAL currently carries a Zacks Rank of 2. The stock’s current-quarter earnings estimates have remained stable over the past 30 days. Further, the company’s shares have gained 18.7% so far this year.
The Zacks Consensus Estimate for First Financial Bankshares, Inc.’s FFIN earnings for the current quarter have remained stable over the past 30 days. Moreover, so far this year, its shares have gained 26.7%. Also, it carries a Zacks Rank of 2.
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First Financial Bankshares, Inc. (FFIN) : Free Stock Analysis Report
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