10 Best BDC Stocks To Invest In

08. Trinity Capital Inc. (NASDAQ:TRIN)

Number of Hedge Fund Holders: 5

Trinity Capital Inc. (NASDAQ:TRIN) is a noteworthy addition to any list of the best business development company (BDC) stocks to invest in. As a BDC, Trinity Capital Inc. (NASDAQ:TRIN) specializes in venture debt, primarily providing loans and equipment financing to growth-stage companies, with a focus on innovative sectors like medical devices and tech. Established in 2019, Trinity Capital Inc. (NASDAQ:TRIN) has quickly built a strong portfolio and presence in the venture capital market. This Phoenix-based company aims to generate consistent income for its investors, which it achieves through a combination of term loans and equity-related investments.

In its Q2 2024 earnings call, Trinity Capital Inc. (NASDAQ:TRIN) reported a record investment income of $54.6 million, a substantial 18.7% year-over-year increase, demonstrating the platform’s growth potential. Trinity’s effective portfolio yield stood at 16%, a strong indicator of the company’s robust performance. The firm also recorded a net asset value (NAV) of $680 million, up from $626 million in the previous quarter, reflecting sound portfolio management and asset growth. The company declared a cash dividend of $0.51 per share for the 18th consecutive quarter, reinforcing its commitment to shareholder returns. Trinity’s dividend yield is particularly attractive, providing a steady income stream to investors seeking both yield and growth potential in their portfolios.

Despite missing earnings expectations with an EPS of $0.506 (versus an expected $0.53), Trinity Capital Inc. (NASDAQ:TRIN) strong fundamentals make it a compelling choice. The company’s ability to maintain a high return on equity (ROE) of 16.3% and a return on average assets (ROAA) of 7.4% underscores its operational efficiency. Additionally, the firm’s diversification into five distinct business verticals, including tech lending and life sciences, offers a broad range of opportunities and reduces reliance on any single sector.

Trinity Capital Inc. (NASDAQ:TRIN) commitment to growth is evident through its strategic expansion into Europe and strong capital raising efforts. With a sound portfolio structure, impressive dividend yield, and a commitment to scaling its business, Trinity remains a solid investment for those looking for high-quality BDC stocks.