10 Best BDC Stocks To Invest In

05. Hercules Capital, Inc. (NYSE:HTGC)

Number of Hedge Fund Holders: 11

Hercules Capital, Inc. (NYSE:HTGC) stands out as a prime candidate for inclusion in the top BDC stocks due to its robust performance and strategic positioning within the business development company (BDC) sector. Specializing in providing venture debt and growth capital, Hercules Capital, Inc. (NYSE:HTGC) focuses on privately held, venture-backed companies at various stages of development. Its expertise extends across technology, SaaS finance, energy tech, and life sciences, making it a versatile and dynamic player in the market.

For Q2 2024, Hercules Capital reported impressive earnings, aligning with market expectations. The company achieved earnings per share of $0.51, matching analyst forecasts. Notably, Hercules Capital, Inc. (NYSE:HTGC) set a record for total gross fundings in the first half of 2024, reaching $1.07 billion—surpassing $1 billion for the first time in its history. This significant milestone underscores the firm’s strong origination capabilities and leadership in the venture lending space.

The company’s performance metrics reflect its financial health and operational efficiency. Hercules Capital, Inc. (NYSE:HTGC) generated a record total investment income of $125 million in Q2 2024, up nearly 8% from the previous year. Net investment income also saw a notable increase, reaching $82.4 million or $0.51 per share. The firm’s net asset value per share stood at $11.43, and it achieved a return on equity of 19.2%. Despite a slight dip in core yield to 13.7% from 14%, Hercules Capital’s focus on high-quality assets and conservative leverage continues to support its growth and stability.

A key highlight for investors is Hercules Capital, Inc. (NYSE:HTGC) strong dividend yield. The company’s base distribution of $0.40 per share was comfortably covered by net investment income, with coverage at 128%. This solid dividend performance enhances its attractiveness to income-focused investors, reinforcing its position as a reliable and rewarding BDC stock. In summary, Hercules Capital, Inc. (NYSE:HTGC) strategic investments, robust financial metrics, and impressive dividend yield make it a standout choice for investors looking to capitalize on opportunities within the BDC sector.