Stock fact sheet · data as of
Prospect Capital Corporation (PSEC): fair value, margin of safety and Wheel Score
Ticker symbol PSEC · Financial Services · Asset Management · United States · Blend Income
Is PSEC undervalued?
Prospect Capital Corporation (PSEC) closed at 1.44 on 5 Nov 2026. The GLS average fair value - the simple average of the 8 valuation models that produced a positive number - is 7.94, which puts the price 82% below it. 7 of the 8 models value the shares above the current price. A gap this wide is rare in our universe of ~7,400 US stocks and is exactly what the Value part of the Wheel Score rewards; it is also where the question "why is it this cheap?" matters most.
There is a wide gap between Lynch (0.6376) and 10 Cap (20.18). When the models are this far apart the "fair value" is really a range, and the margin of safety above should be read with that range in mind.
Ranked against every other company we cover, neither cheapness nor growth clearly wins for PSEC, so the nightly engine files it under Blend (value score 89, growth score 85, out of 100). It also carries the Income tag (Income = a dividend yield of 4% or more).
Nine valuation models for PSEC
Each model turns the latest filed numbers into a value per share; the GLS fair value is the simple average of the ones that produce a positive number. The last two rows are shown for reference and never enter the average. The Quote page lets you switch any model off and add your own margin of safety.
| Model | Value | vs price | What it measures |
|---|---|---|---|
| DCF | - | - | Present value of the projected free cash flows, discounted at the cost of capital; no value tonight |
| Graham Number | 5.78 | +302% | The most a defensive investor pays for the earnings and book value per share |
| Graham Growth | 2.57 | +79% | Graham's growth formula: EPS × (8.5 + 2 × growth), adjusted for bond yields |
| Lynch | 0.6376 | -56% | EPS × the earnings growth rate (PEG of 1), growth capped at 25% |
| GLS Growth | 9.76 | +578% | EPS compounded ten years at the blended growth rate, discounted back at 15% a year |
| 10 Cap | 20.18 | +1301% | Owner's earnings (operating cash flow less maintenance capex) capitalised at 10% |
| Payback Time | 15.78 | +996% | Eight years of compounded free cash flow: the price at which the business pays for itself |
| DDM | 7.06 | +390% | Dividend discount model: next year's dividend ÷ (10% − 3% growth); needs a dividend |
| EPV | 1.77 | +23% | Earnings power value: current EPS capitalised at 9% with no growth |
| Zombie (liquidation) | -3.56 | -347% | Current assets less all liabilities, per share: the balance-sheet floor. Not in the average |
| Wall St target | 2.50 | +74% | Analysts' average 12-month price target. Not in the average |
Quality and financial health
Prospect Capital Corporation scores 7 of 9 on the Piotroski F-score, the nine yes/no tests of profitability, leverage and efficiency on the latest annual accounts - a strong reading that passes the "Piotroski 6 or more" Wheel Trade Filter with room to spare. A GLS Moat score of 4.3/10 is a weak reading: the accounts do not show returns and margins that competitors have been unable to wear down, so the Moat part of the Wheel Score contributes little.
Returns on capital are thin or negative - ROIC 2.4%, ROE 3.4%, ROA 2.4% - with debt at 0.41 times equity and a free-cash-flow yield of 62.3%.
The dividend yield is high at 33.33% (payout ratio 351%) - a payout above 100% of earnings, which is not covered by profits. A yield this size is often the market's way of pricing a risk to the payout, so the health score and cash flow matter more than usual.
Institutional ownership scores 2/10, insider activity 10/10 and Congressional trading 5/10 on the GLS smart-money scales.
| Piotroski F-score | 7 / 9 | ROIC | 2.4% |
|---|---|---|---|
| GLS Moat | 4.3 / 10 | ROE | 3.4% |
| Debt / equity | 0.41 | ROA | 2.4% |
| Free-cash-flow yield | 62.3% | Payout ratio | 351% |
| Institutions | 2 / 10 | Insiders · Congress | 10 · 5 / 10 |
Wheel Score 43: Weak
With a Wheel Score of 43 Prospect Capital Corporation sits in the Weak band. It fails filter 6, no serious red flags - Red Flags score 45 (under 60); and filter 8, big enough - market cap $769M (under $1.0B); and filter 9, not a penny stock - price 1.44 (under $5); Red Flags (weak) is its weakest part.
Implied volatility is 72% on the near-the-money contracts 20-60 days out - above the 60% top of the sweet spot. It still passes the 25-80% filter, but the Wheel Score rewards it less because volatility this high usually comes with a reason. Chain open interest is 6,087 contracts across all expiries - enough for the wheel at normal size.
Volume runs at 17.7M shares a day on a market cap of $769M, with a beta of 0.82; the Stability part of the Wheel Score rates that fair.
| Filter | Wheel Trade Filter | Result | Detail |
|---|---|---|---|
| 1 | Options that actually trade | Passes | Listed options with 1,000+ contracts of open interest and 100+ traded a day |
| 2 | A real business, not a gamble | Passes | Profitable over the last twelve months - not a speculative stock, fund or note |
| 3 | Below fair value | Passes | Trading below the nine-model average fair value (margin of safety above 0) |
| 4 | Financially healthy | Passes | Piotroski F-score 6 or more out of 9 (a company with no score on file passes) |
| 5 | Can repay its debt | Passes | Long-term debt repaid from 3 years of operating cash flow or less (6 for real estate and utilities; banks and insurers are not judged on it) |
| 6 | No serious red flags | Fails | Red Flags score 45 (under 60) |
| 7 | A premium worth selling | Passes | Implied volatility 25-80% (enough premium, not a lottery ticket) |
| 8 | Big enough | Fails | market cap $769M (under $1.0B) |
| 9 | Not a penny stock | Fails | price 1.44 (under $5) |
| How it ranks | Rating | From | |
|---|---|---|---|
| Value | Strong | 82% below fair value | |
| Premium | Good | implied volatility 72% | |
| Moat | Fair | moat 4.3/10 | |
| Health | Good | Piotroski 7/9 | |
| Red Flags | Weak | Red Flags score 45/100 | |
| Option trading | Fair | 1,330 contracts a day, 6,087 open interest | |
| Stability | Fair | beta 0.82, $769M company |
The Wheel Score ranks ~7,400 US stocks for selling cash-secured puts and covered calls: a stock must pass all 9 Wheel Trade Filters to score 70, and the score then ranks the ones that pass; the Sunday Scan is the top 10. It is updated nightly and is not a recommendation. How the Wheel Score works · the walkthrough lesson shows how it fits into a trade, start to finish.
Upcoming events
No upcoming earnings date is recorded for PSEC in the nightly calendar.
Earnings, dividend, IPO, split and economic calendars for the whole market, filterable to your watchlists.
Similar stocks in Asset Management
The 12 companies below are the closest to Prospect Capital Corporation by market cap within the Asset Management industry, each with its own fact sheet; the Compare page puts up to eight of them side by side.
| Stock | Close | Fair value | MoS | Wheel | Mkt cap |
|---|---|---|---|---|---|
| ARYVX American Century Global Real Estate Fd Inv Cl | 14.65 | 1,128.66 | +99% | 25No options | $765M |
| RPC Ridgepost Capital, Inc. | 9.68 | 6.72 | -44% | 32Weak | $765M |
| SLVR Sprott Silver Miners & Physical Silver ETF | 47.96 | 93.54 | +49% | 42Weak | $777M |
| FKIFX Fidelity Freedom Index 2010 Fund - Investor Class | 14.04 | 3.89 | -261% | 11No options | $760M |
| CGBD Carlyle Secured Lending, Inc. | 11.04 | 20.16 | +45% | 47Weak | $760M |
| BTO John Hancock Financial Opportunities Fund | 38.22 | 118.17 | +68% | 24No options | $757M |
| CPPTL Copper Property CTL Pass Through Trust | 10.05 | 12.59 | +20% | 28No options | $754M |
| PEO Adams Natural Resources Fund Inc | 27.99 | 55.18 | +49% | 40Weak | $785M |
| AMJB Alerian MLP Index ETN | 33.78 | 13,562.93 | +100% | 26No options | $788M |
| THQ Abrdn Healthcare Opportunities Fund | 19.02 | 31.50 | +40% | 24No options | $788M |
| FDUS Fidus Investment Corporation | 19.70 | 37.41 | +47% | 50Fair | $748M |
| FTIEX Fidelity Total International Equity Fund | 16.29 | 8.69 | -88% | 14No options | $747M |
⚖ Compare PSEC with 7 of them All Financial Services stocks →
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Start free See the Sunday ScanQuestions about PSEC
Is PSEC undervalued right now?
By the GLS models, yes: at 1.44 the stock is 82% below the average fair value of 7.94 (data as of 5 Nov 2026). Whether the discount is deserved is the question to research next.
What is the Wheel Score of PSEC and what does it mean?
PSEC scores 43 out of 100 (Weak) - it fails Wheel Trade Filters 6, 8, 9. The Wheel Score ranks stocks for the wheel strategy - selling cash-secured puts, then covered calls if assigned - in two parts: the 9 pass/fail Wheel Trade Filters (busy options, a real business, below fair value, Piotroski 6 or more, debt it can repay, a Red Flags score of 60 or more, implied volatility of 25-80%, a $1 billion company, $5 a share) and a ranking of how strongly a stock passes on value, premium, moat, health, red flags, option trading and stability. A stock that fails any filter stays under 70; 70-84 is Good, 85 and above is Prime. The Sunday Scan is the top 10 that pass, sorted by Wheel Score.
What is the GLS fair value for PSEC?
7.94 per share as of 5 Nov 2026 - the simple average of the 8 valuation models (out of nine: DCF, Graham Number, Graham Growth, Lynch, GLS Growth, 10 Cap, Payback Time, DDM and EPV) that produced a positive value. The models run every night on the latest filings; the Quote page lets you switch any of them off and add a margin of safety of your own.
When does Prospect Capital Corporation report earnings next?
No upcoming earnings date is recorded for PSEC in our calendar as of 5 Nov 2026; the Calendars page is refreshed every morning.
Does PSEC have listed options, and how liquid are they?
Yes. The nightly snapshot found 18 listed contracts with 6,087 open interest across all expiries and implied volatility of 72% on the near-the-money contracts. The Options scanner lists the cash-secured put and covered call set-ups with premium and annualised yield worked out.