This 13.2% Yielder Pays a Dividend Every Month

Is it too good to be true? [Shield] AN OXFORD CLUB PUBLICATION [Wealthy Retirement]( [View in browser]( SPONSORED [The Mysterious VC Firm Behind Nvidia's Secret Weapon]( [Businessman in black suit]( In 1999, Sutter Hill Ventures made a bold bet on Nvidia before anyone had heard of it. Now, they're going all-in on Nvidia's hush-hush partner that's powering their new Blackwell chip. Discover the little-known company that's attracting massive investments from the visionaries behind Nvidia's 100,000% rise. [Unlock the hidden key to AI's future.]( [SAFETY NET]( [It's Still Hard to Trust This 13.2% Yielder]( [Marc Lichtenfeld, Chief Income Strategist, The Oxford Club]( [Marc Lichtenfeld]( Like a partner who has burned you before but is trying to change, Prospect Capital (Nasdaq: PSEC) is still hard to trust. The business development company, or BDC, lends money to and invests in private companies. The stock is very popular with income investors because of its 13.2% yield, its low share price, and the fact that it pays a dividend monthly. Let's see whether the company can actually afford its dividend. In Prospect Capital's fiscal year that ended on June 30, 2023, it generated $421 million in net investment income (NII). NII is the measure of cash flow that we use for BDCs. It tells us how much money the company's investments made after expenses. That 2023 NII figure was up sharply from the previous two years. SPONSORED [Yours Free! Top SIX AI Dividend Stocks Right Now]( Marc Lichtenfeld - income expert and author of Get Rich with Dividends - is giving away his Free Ai Income Playbook... You'll discover... - A special income play that pays double-digit yield - How to get into an AI income trust - And finally, Marc's No. 1 dividend stock AI income. [Click here to get the names and ticker symbols now](... before the download link expires. **NO CREDIT CARD REQUIRED!** When the company reports results from its most recent fiscal year next month, I estimate it will report $457 million in NII. We're seeing solid growth over the past year and over the past three years, which is a great sign. [Chart: Can Prospect Capital Afford Its Dividend?]( [View larger image]( You can see from the chart above that NII has been steadily growing, as has the total amount of dividends paid - though it's important to note that the total dividend payout has increased because the number of outstanding shares has risen, not because the dividend itself has risen. The company's monthly dividend per share has remained at $0.06 for more than six years. BDCs must pay out 90% of their profits in dividends, so I'm OK with them paying out up to 100% of their NII. (Profits and NII aren't the same thing, but they are similar.) Prospect Capital's 2023 payout ratio of 71% and its expected 79% payout ratio in 2024 are well within my comfort zone. It appears that the company can easily afford its dividend... but I do see one potential problem. [Find Out What It Is Here]( [Investment U Conference 2025 - Ponte Vedra Inn & Club in Ponte Vedra Beach, Florida, March 30-April 2, 2025]( BUILD AND PROTECT YOUR WEALTH [Here are Three Steps You Need to Take to Protect and Grow Your Money When America Is Threatened With Mass Unemployment. 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