IB Net Payout Yields Model

Hercules Technology Benefits From Limited Defaults

Small-Cap Insight

Investors looking for a stock that provides large yields from investing in venture capital firms should look no further than Hercules Technology Growth Capital (HTGC). Considering the company invests in early stage, venture backed firms; it might surprise the investment community that the company has a limited history of payment defaults. Historically, the net realized loss since inception only represents 1.1% of total commitments or an annualized loss rate of only a low 13 basis points. So if the company has historically lost only $42.8 million on a substantial investment portfolio over 10 years, why has the stock historically paid high dividends?

Hercules Technology is a leading specialty finance company that focuses on loaning senior secured debt with floating interest rates to venture capital-backed companies in tech-related markets. The company has a high focus on the biotechnology, life science, and cleantech industries that historically are more willing to take on debt to fund growth as opposed to the typically fast growing technology company.

Read the full article at Seeking Alpha.

Disclosure: No positions mentioned. Please review the disclaimer page for more details. 


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