Kayne Anderson Energy Development (KED) & Prospect Capital (PSEC) Financial Review
Kayne Anderson Energy Development (NYSE: KED) and Prospect Capital (NASDAQ:PSEC) are both financials companies, but which is the better business? We will contrast the two companies based on the strength of their dividends, analyst recommendations, earnings, institutional ownership, profitability, valuation and risk.
Volatility & Risk
Kayne Anderson Energy Development has a beta of 1.28, suggesting that its stock price is 28% more volatile than the S&P 500. Comparatively, Prospect Capital has a beta of 0.55, suggesting that its stock price is 45% less volatile than the S&P 500.
This table compares Kayne Anderson Energy Development and Prospect Capital’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Kayne Anderson Energy Development||-2,475.00%||-13.79%||-8.15%|
This is a breakdown of current ratings and recommmendations for Kayne Anderson Energy Development and Prospect Capital, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Kayne Anderson Energy Development||0||0||1||0||3.00|
Kayne Anderson Energy Development currently has a consensus price target of $20.00, suggesting a potential upside of 15.41%. Prospect Capital has a consensus price target of $6.17, suggesting a potential downside of 11.27%. Given Kayne Anderson Energy Development’s stronger consensus rating and higher probable upside, equities analysts plainly believe Kayne Anderson Energy Development is more favorable than Prospect Capital.
Earnings and Valuation
This table compares Kayne Anderson Energy Development and Prospect Capital’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Kayne Anderson Energy Development||N/A||N/A||N/A||($0.07)||-247.57|
|Prospect Capital||$701.05 million||3.57||$252.90 million||$0.51||13.63|
Prospect Capital has higher revenue and earnings than Kayne Anderson Energy Development. Kayne Anderson Energy Development is trading at a lower price-to-earnings ratio than Prospect Capital, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
15.6% of Prospect Capital shares are held by institutional investors. 7.1% of Prospect Capital shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Kayne Anderson Energy Development pays an annual dividend of $1.60 per share and has a dividend yield of 9.2%. Prospect Capital pays an annual dividend of $0.72 per share and has a dividend yield of 10.4%. Kayne Anderson Energy Development pays out -2,285.7% of its earnings in the form of a dividend. Prospect Capital pays out 141.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Prospect Capital beats Kayne Anderson Energy Development on 9 of the 14 factors compared between the two stocks.
About Kayne Anderson Energy Development
Kayne Anderson Energy Development Company is a non-diversified, closed-end fund. The Fund’s investment objective is to generate both current income and capital appreciation, through equity and debt investments. It seeks to achieve this objective by investing approximately 80% of its total assets in securities of companies that derive their revenue from activities in the energy industry, including midstream energy companies, which operates assets used to gather, transport, process, treat, terminal and store natural gas, natural gas liquids, crude oil or refined petroleum products; upstream energy companies, which are engaged in the exploration, extraction and production of natural resources, including natural gas, natural gas liquids and crude oil, from onshore and offshore geological reservoirs, and other energy companies, which are engaged in owning, leasing, managing, producing, processing and selling of coal and coal reserves. KA Fund Advisors, LLC is the advisor of the Fund.
About Prospect Capital
Prospect Capital Corporation is a financial services company. The Company primarily lends to and invests in middle market privately held companies. The Company is a closed-end investment company. Its investment objective is to generate both current income and long-term capital appreciation through debt and equity investments. The Company invests primarily in senior and subordinated debt and equity of private companies in need of capital for acquisitions, divestitures, growth, development, recapitalizations and other purposes. The Company makes investments, including lending in private equity sponsored transactions, lending directly to companies not owned by private equity firms, control investments in corporate operating companies, control investments in financial companies, investments in structured credit, real estate investments, investments in syndicated debt, aircraft leasing and online lending. The Company is managed by its investment advisor, Prospect Capital Management L.P.
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