HTGC

Hercules Capital remains a top private credit BDC, excelling in new tech sector fundings and portfolio growth in the second-quarter. HTGC delivered strong fundings and net investment income growth while maintaining robust dividend coverage with a 125% coverage ratio in Q2'26. Non-accrual ratios remain exceptionally low at 0.1%, underscoring superior credit quality versus peers like ARCC, OBDC, and BXSL.

Income investors chasing yield tend to gravitate to the same handful of REITs and MLPs, but three finance-sector payers with materially higher yields keep getting overlooked.

Hercules Capital's net asset value rose to $12.15 per share during the second quarter on the back of healthy net investment income and realized gains. Total investment income grew 8.5% year-over-year, with new originations of $927.3 million and effective yield expanding by 60 basis points sequentially to 13.4%. HTGC's dividend coverage was up by 400 basis points sequentially, with its dividend yield at 11.5% and non-accrual rate muted at 0.1% of its investment portfolio at fair value.

Hercules Capital remains a strong buy, with robust Q2 earnings, attractive price-to-NAV, and well-supported distributions. HTGC's software sector exposure, once a risk, now positions it for upside as AI and tech sentiment improves. Q2 saw net investment income of $0.50/share, 125% base distribution coverage, and growing spillover income, reinforcing dividend sustainability.

Hercules Capital is rated Buy at $16.40, targeting $18–$19.50 in 12–18 months, with an attractive income-driven return profile. HTGC benefits from record venture capital activity and a fast-growing Adviser business but faces a concentrated AI lending environment and early loan repayments. Dividend yield is 9.8% base (11.5% total), well-covered by NII, but credit quality trends and premium to NAV require close monitoring.

Hercules Capital's shares up 3% after Q2 earnings meet estimates and record total investment income climbs 8.5%, while higher expenses weigh on performance.

Hercules Capital NYSE: HTGC reported record second-quarter investment income and net investment income, supported by strong originations, elevated early loan repayments and stable portfolio credit performance.

Hercules Capital, Inc. (HTGC) Q2 2026 Earnings Call Transcript

SAN MATEO, Calif.--(BUSINESS WIRE)--Hercules Capital, Inc. (NYSE: HTGC) (“Hercules,” “Hercules Capital,” or the “Company”), the largest and leading specialty financing provider to innovative venture, growth and established stage companies backed by some of the leading and top-tier venture capital and select private equity firms, today announced its financial results for the second quarter ended June 30, 2026. The earnings release can be accessed at Hercules' Investor Relations website at https:.

The market is very richly priced right now, making high-quality companies trading at a deep discount a rare find. I share two deeply undervalued quality dividend machines yielding up to 11.6% that the market has thrown out with the bathwater. I also share the risks involved and detail why I think they are highly compelling buys right now.