Three business development companies (BDCs) including Prospect Capital, FS KKR Capital, and Ares Capital are offering dividend yields as high as 28%, but each faces financial challenges that threaten payout sustainability. Prospect Capital's yield rose due to a steep stock price drop and shrinking net asset value (NAV), with upcoming bond maturities adding pressure. FS KKR Capital relies on a temporary fee waiver to cover dividends, which expires soon, while Ares Capital's earnings now trail its dividend payments despite stable stock prices. Investors should be cautious and evaluate net investment income coverage, NAV trends, and reasons behind stock declines before chasing high yields, as dividend cuts can lead to simultaneous losses in income and principal.
Prospect Capital (PSEC) trades at its 52-week low of USD 1.49 on Pluang as of Oct 21, 2026 23:02 WIB, offering a high dividend yield of 28.19%. This contrasts sharply with its 52-week high of USD 3.05, highlighting significant price volatility. Despite the steep decline, investor interest remains strong with 94% buy orders and a typical hold time of 79 days on the platform.
