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Prospect Capital (PSEC) Maintains Monthly Dividends as Portfolio Transition Gains Pace

Prospect Capital Corporation (NASDAQ:PSEC) is included among the 10 Monthly Dividend Stocks to Buy and Hold Forever.

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.

While we acknowledge the risk and potential of PSEC as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than PSEC and that has 10,000% upside potential, check out our report about this cheapest AI stock.

READ NEXT: 10 Best Dow Stocks to Invest In Now and 12 High Dividend Stocks Picked By Billionaire Ray Dalio

Disclosure: None. Follow Insider Monkey on Google News.

The $250 Trillion AI Hype is Real. A few years from now, you’ll probably wish you’d bought this stock.

Dr. Inan Dogan

Dr. Ian Dogan

Co-Founder and Research Director at Insider Monkey

When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

Do the math. According to Musk, this technology could be worth $250 trillion by 2040.

Put another way, that’s roughly equal to:

  • 175 Teslas
  • 107 Amazons
  • 140 Metas
  • 84 Googles
  • 65 Microsofts
  • And 55 Nvidias

And here’s the wild part — this $250 trillion wave isn’t tied to one company, but to an entire ecosystem of AI innovators set to reshape the global economy.

It’s a leap so massive, it could reshape how businesses, governments, and consumers operate worldwide.

Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.

How could anything be worth that much?

The answer lies in a breakthrough so powerful it’s redefining how humanity works, learns, and creates.

And this breakthrough has already set off a frenzy among hedge funds and Wall Street’s top investors.

What most investors don’t realize is that one under-owned company holds the key to this $250 trillion revolution.

In fact, Verge argues this company’s supercheap AI technology should concern rivals.

Before I reveal the details, let’s talk about how some of the richest people on the planet are positioning themselves.

  • Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
  • Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

When billionaires from Silicon Valley to Wall Street line up behind the same idea — you know it’s worth paying attention to.

Even as we admire what Tesla, Nvidia, Alphabet, and Microsoft have built, we believe an even greater opportunity lies elsewhere…

But the real story isn’t Nvidia — it’s a much smaller company quietly improving the critical technology that makes this entire revolution possible.

And judging by what I’m hearing from both Silicon Valley insiders and Wall Street veterans…

This prediction might not be bold at all:

A few years from now, you’ll wish you’d owned this stock.

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Wall Street calls this $3 stock a “Melting Ice Cube.” They said the same thing about BTI before it returned 90%.

Dr. Inan Dogan

Dr. Ian Dogan

Co-Founder and Research Director at Insider Monkey

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We alerted our subscribers, and BTI returned 90% in just 16 months.

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Today, we have identified a nearly identical pattern in a digital-first giant trading at $3.

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