PSEC vs NGPC-- which financial microcap is better?

[raylopez99]

Statistics change over time. At one point Jose Bailen liked PSEC, but
their numbers have changed since last fall (says Reuters). So, what
to do? I am holding PSEC, but NGPC looks even better to me.

RL

Jose Bailen:
Prospect Energy Corp (PSEC), a company that finances investments in
the
energy sector. Its valuation is very attractive (a P/B of just 1.17, P/
E of 8.61), combined with a healthy earnings growth rate, and a
dividend yield of 8.76% which looks sustainable given that the payout
ratio is just 65.5 percent. The company has been around since 1988
(although it went public just a couple of yrs ago). It looks clearly
an
undervalued stock.

Ray Lopez:
NGP Capital Resources Company (NGPC) is another slightly smaller
'competitor' to PSEC, and their numbers are also good--in fact, better
than PSEC as of early 2008 (payout ratio for PSEC went to 213%!, while
NGPC remains at 70%; yield is 13% vs 10% for PSEC)

[JOSE BAILEN]

I agree. NGPC looks better than PSEC right now, but as you said,
statistics change over time. One year ago, PSEC's earnings and ROI
were better than NGPC's, now is the other way around. They are in the
same business -oil, gas, and energy financing-. Probably a prudent
strategy -given the uncertainty about the future- is to hold stocks of
both companies, after all, the two companies look undervalued under a
"reasonable" central earnings and cost of capital forecasts...