Prospect Capital cuts dividend and sees 10% share drop despite stable portfolio quality

Prospect Capital's share price dropped 10% after it missed revenue expectations for Q3 2026, reported a decline in net asset value, and cut its monthly dividend to $0.035 per share. Despite this, its portfolio quality remained stable at 0.7%, outperforming peers, with an increase in first lien loans to 72%. The stock trades at a 58% discount to net asset value, reflecting market skepticism, but the firm maintains a 'Strong Buy' rating for investors willing to accept higher risk for income and capital growth. The dividend cut was influenced by pressure from preferred stock offerings, signaling cautious financial management.