Prospect Capital (PSEC): The Holy Grail of Dividends

Looking for a stock that pays huge Dividends? Then look no further than Prospect Capital Corporation (Public, NASDAQ:PSEC).

Prospects Capital is a financial services company that primarily lends to and invests in middle market privately-held companies.

There are a few intriguing things about the company.

First, they have a record of increasing their Quarterly Dividend. Prospect recently raised its quarterly dividend to $0.4075/share, up from $0.40625/share. Now this may not seem like much, but this was the 20th consecutive quarterly increase.

The current yield based on the new dividend is a stunning 15.22%.

Sponsor:

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Secondly, check out their record of inside buying during 2009. Insiders at the company are very bullish on the company - and I like that in a stock.

Insider Trading	Relationship	Date	Transaction	Cost	#Shares	Value ($)	#Shares Total
Anderson Graham	Director	9/29/2009	Buy	10.7	2,000	21,320	45,000
Barry Matthew C.	Family Insider	9/28/2009	Buy	10.4	450	4,666	861
Stark Eugene S	Director	9/25/2009	Buy	10.1	1,000	10,100	3,853
Barry John F	CEO	4/23/2009	Buy	7.87	32,795	258,136	630,044
Barry John F	CEO	4/22/2009	Buy	8.01	50,000	400,735	597,249
Anderson Graham	Director	2/24/2009	Buy	8.28	1,000	8,280	2,500
Barry John F	CEO	2/23/2009	Buy	8.16	10,000	81,600	547,249
Eliasek M Grier	COO	2/23/2009	Buy	8.24	12,021	99,053	29,276
Eliasek M Grier	COO	2/20/2009	Buy	8	118	944	17,255
Barry John F	CEO	2/18/2009	Buy	8.5	10,000	85,000	537,249
OSWALD BRIAN H	CFO & CCO	2/17/2009	Buy	8.5	1,000	8,500	7,125
Barry John F	CEO	2/17/2009	Buy	8.52	15,000	127,800	826,635
Barry John F	CEO	2/17/2009	Buy	8.64	5,000	43,200	811,635
Barry John F	CEO	2/17/2009	Buy	8.53	15,000	127,950	527,249
Barry John F	CEO	2/17/2009	Buy	8.63	5,000	43,150	512,249
OSWALD BRIAN H	CFO & CCO	2/13/2009	Buy	8.9	1,000	8,900	6,125
Barry John F	CEO	2/13/2009	Buy	8.99	7,805	70,167	806,635
Barry John F	CEO	2/13/2009	Buy	8.99	6,000	53,940	798,830
Barry John F	CEO	2/13/2009	Buy	8.99	7,500	67,425	507,249
Barry John F	CEO	2/13/2009	Buy	9	5,000	45,000	499,749
Barry John F	CEO	2/12/2009	Buy	9.15	10,000	91,500	729,981
Barry John F	CEO	2/12/2009	Buy	9.15	15,000	137,250	1,219,376
Stark Eugene S	Director	2/11/2009	Buy	9.75	500	4,875	2,500

Fellow Masters, Prospect came out of the Financial Crises a winner, and should become a much larger player in the middle market for debt.

Sure, the stock is nearing a 52 week high, but with the Dividend the company pays, I think shares could make it back to early 2008 price levels - right around $15 a share.