10 Monthly Dividend Stocks To Buy and Hold Forever

8. Prospect Capital Corporation (NASDAQ:PSEC)

Number of Hedge Fund Holders: 13

During the fiscal Q2 2026 earnings call, CEO John Barry said Prospect Capital Corporation (NASDAQ:PSEC) generated net investment income of $91 million, or $0.19 per common share. He also reported a net asset value of $3 billion, which came out to $6.21 per common share. He added that the firm’s net debt to total assets ratio was 28.2% as of December 31. He also announced monthly distributions of $0.045 per share for February, March, and April.

Barry said the company continued to move forward on its strategic priorities. One area he pointed to was the shift toward its core business of first lien senior secured middle market loans. The first lien mix increased by 728 basis points to 71.4% since June 2024. He also noted efforts to reduce second lien exposure. The company has nearly completed its exit from subordinated structured notes, with that segment down 818 basis points to almost zero over the same period. He added that the firm remained active in exiting targeted equity-linked assets, including real estate. It completed major asset sales within Echelon Transportation in July and December 2025.

As a BDC, Prospect Capital invests in debt and equity in “middle market” companies that often struggle to secure bank loans because they are seen as higher-risk borrowers. In return, BDCs charge higher interest rates than traditional banks. They also need to pay out at least 90% of their taxable income as dividends to maintain a lower tax rate.

Prospect Capital Corporation (NASDAQ:PSEC) holds more than 450 investments across its $6.5 billion portfolio, though it remains smaller than top-tier BDCs. Its portfolio also leans more toward higher-risk, lower-quality assets, including structured credit, payment-in-kind loans, equity, and real estate. That explains why Prospect offers higher yields than other BDCs, but it also carries greater risk and is more exposed to broader macro pressures.