Hercules Capital Stock Review and BDC Investment Guide

Hercules Capital is a Business Development Company (BDC) that focuses on providing financing to small and medium-sized businesses.

As of 2022, Hercules Capital has a market capitalization of over $2 billion.

Hercules Capital has a strong track record of generating returns for its shareholders, with a dividend yield of around 10% over the past year.

Their investment strategy involves providing senior secured loans to businesses in a variety of industries, including technology, healthcare, and consumer goods.

Hercules Capital has a portfolio of over 400 active investments, with a total investment size of over $4 billion.

Hercules Capital's revenue in 2023 was $460.67 million, a significant increase of 43.20% from the previous year.

This growth is a testament to the company's strong financial performance, with earnings also seeing a substantial boost. Earnings were $334.14 million, an increase of 234.55% from the previous year.

Hercules Capital has made a significant move in its financial performance by renewing and increasing its multi-currency credit facility to $300M.

This substantial increase in credit facility demonstrates Hercules Capital's ability to secure large sums of money to support its business operations.

The credit facility is now valued at $300M, a substantial boost from its previous value.

This development is a testament to Hercules Capital's strong financial standing and its ability to attract significant investments.

The company's efforts to increase its credit facility will likely have a positive impact on its future financial performance.

A $95,000 BDC portfolio can generate $10,000 in annual income.

Private credit/BDC investments offer a significant portfolio yield enhancement, making them a great option for those looking to boost their income.

Investing in a BDC portfolio can provide exposure to structural growth, which is a key factor in achieving long-term financial success.

By investing in a BDC portfolio, you can potentially earn a higher return on investment compared to traditional investments.

Investors who have successfully implemented a BDC portfolio strategy have reported significant portfolio yield enhancements, making it a viable option for those seeking to increase their income.

To achieve a $10,000 annual income, you'll need to invest in a $95,000 BDC portfolio.

Private credit/BDC investments can be a valuable addition to a diversified investment portfolio, providing a unique opportunity for growth and income generation.

Hercules Capital offers a 10% dividend yield, supported by strong balance sheet quality and low non-accrual percentage of 0.6%.

The company's high-yielding dividend is a result of its tax structure, which requires it to distribute 90% of its income to investors to be exempt from federal taxes.

Hercules Capital invests in start-ups in technology, life sciences, and renewable energy, and over 250 of its portfolio companies have gone public through an IPO, merged, or were acquired since its inception.

Most of Hercules's assets are in debts structured with warrants, equity, and options, giving the company a way to benefit from the upside results of those companies that it invests in.

The company's most recent quarterly dividend payment of $0.40 per share gives it a dividend yield of 8.4% based on its stock price today, but it also issued a supplemental dividend of $0.08 per share in the quarter, bringing the combined payout to over 10%.

Hercules Capital's average payout over the past decade is in line with its current payout, showing a consistent track record of delivering high-yielding dividends to investors.

Hercules Technology Growth Capital has had some notable insider activity recently. Botelho Kiersten Zaza sold 819 shares on January 10, 2025, at a price of $19.73 per share.

Several insiders, including Bluestein Scott, Follmann Christian, and Meyer Seth H, also sold shares on the same day. In fact, Bluestein Scott sold a whopping 22,006 shares, while Meyer Seth H sold 7,721 shares. Follmann Christian sold 1,256 shares, and Meyer Seth H sold 7,721 shares as well.

The biggest buyer of shares on January 8, 2025, was Bluestein Scott, who purchased 241,742 shares at a price of $19.98 per share. Other notable buyers include Meyer Seth H, who bought 82,583 shares, and Follmann Christian, who bought 33,784 shares.

Here's a breakdown of the insider buying and selling activity on January 8, 2025:

As for shareholder ownership, the largest shareholder of Hercules Technology Growth Capital is the free float, which owns approximately 98.07% of the company.

Insider activity is a key indicator of a company's health and future prospects. Insider buying and selling can reveal valuable information about a company's management and shareholders' confidence in its performance.

Insiders, such as executives and directors, are required to disclose their buying and selling activities. This information is publicly available and can be a useful tool for investors. For example, on August 5, 2024, DeAnne Aguirre bought 4,521 shares of the company.

Insiders often have access to confidential information about the company, making their buying and selling decisions more informed. However, this doesn't always mean they have inside knowledge about the company's future performance. On January 8, 2025, Scott Bluestein bought 241,742 shares of the company.

Some insiders may buy or sell shares as part of a pre-arranged plan, rather than based on current market conditions. For instance, on January 10, 2025, Christian Follmann sold 4,266 shares of the company. This can be a useful signal for investors, as it can indicate a change in the insider's perspective on the company's value.

Here are some key insider activity statistics for the company:

Insider buying and selling can be a useful indicator of a company's future prospects. However, it's essential to consider other factors, such as the company's financial performance and industry trends, when making investment decisions.

As we explore the world of insider activity and shareholder dynamics, let's take a closer look at the shareholder breakdown of Hercules Technology Growth Capital. Freefloat holds a significant 98.07% stake in the company, making it the largest shareholder.

The remaining shares are distributed among various institutional investors. Kingdom Holding Co. is the second-largest shareholder, holding 5.62% of the company.

Some notable institutional investors include Van Eck Associates Corp., Sound Income Strategies LLC, and T. Rowe Price Investment Management, Inc. These investors hold smaller stakes, ranging from 2.05% to 0.84%.

Here's a breakdown of the top shareholders:

Analyst Ratings are a crucial factor to consider when deciding whether to invest in Hercules Capital stock. Analysts believe this stock is likely to outperform the market over the next twelve months.

The average analyst rating for HTGC stock from 8 stock analysts is "Buy". This is a strong indicator that the stock has potential for growth. Analysts are optimistic about the stock's future performance.

According to the analyst ratings, 8 stock analysts have given HTGC stock an average rating of "Buy". This suggests a high level of confidence in the stock's ability to outperform the market.