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4 Reasons to Invest in Hercules Capital (HTGC) Stock Right Now
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Hercules Capital, Inc. (HTGC - Free Report) is expected to continue to witness improvement in the top line, given the growing demand for customized financing. Moreover, backed by a solid balance sheet and liquidity position, the company is expected to keep enhancing shareholder value through efficient capital deployment activities. Hence, it seems to be a wise idea to add the stock to your portfolio now.
The Zacks Consensus Estimate for HTGC’s current-year earnings has been revised 5.9% upward over the past 30 days. This reflects that analysts are optimistic regarding the company’s earnings growth prospects. Hence, currently, HTGC sports a Zacks Rank #1 (Strong Buy).
Looking at its price performance, shares of the company have gained 0.5% in the past six months against the industry’s decline of 2.9%.
Image Source: Zacks Investment Research
Mentioned below are some key factors that make HTGC an attractive investment option now.
Earnings per Share (EPS) Strength: Hercules Capital has witnessed earnings growth of 2.5% over the last three to five years. Over the same period, the industry to which the stock belongs has declined 2.4%.
For 2022, the company’s earnings are projected to grow 10.9% For 2023, earnings are projected to increase 22.6%.
Revenue Growth: Hercules Capital’s total investment income has grown at a compound annual growth rate of 2.4% over the last three years (2019-2021). The uptrend continued in the first nine months of 2022.
Hercules Capital is a small participant in a market with huge growth prospects. In 2021, the company closed $2.6 billion in new debt and equity commitments. In the first nine months of 2022, it reported $2.48 billion in gross new debt and equity commitments. Thus, driven by the rise in demand for customized financing and a robust deal pipeline, total new commitments are expected to keep increasing, thereby positively impacting the top line.
HTGC is expected to deliver top-line growth of 11.5% for 2022 and 29% for 2023.
Superior Return on Equity (ROE): Hercules Capital’s current ROE is 12.47% compared with the industry average of 9.19%, reflecting the company’s better positioning than peers in efficiently using shareholders’ funds.
Efficient Capital Deployments: Hercules Capital’s capital deployment plan seems impressive. In order to maintain its RIC status, the company distributes approximately 90% of its taxable income. It announced a 2.9% hike in the quarterly distribution in October 2022, following a 6.1% hike in July, a 3.1% hike in October 2021 and a 3.2% hike in May 2019. Management plans to revisit its dividend policy at the end of every quarter and determine if any changes are required.
Thus, given a solid liquidity position, the company will likely be able to continue enhancing shareholder value through efficient capital deployment activities.
Other Stocks Worth a Look
A couple of other top-ranked stocks from the same space are Gladstone Investment Corporation (GAIN - Free Report) and Main Street Capital Corporation (MAIN - Free Report) .
Gladstone Investment has witnessed an upward earnings estimate revision of 21.5% for the current fiscal year over the past 30 days. Its share price has risen 12.8% over the last month. GAIN currently boasts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Main Street Capital also sports a Zacks Rank #1 at present. For the current year, it has witnessed an upward earnings estimate revision of 6.3% over the past 30 days. MAIN’s share price has increased 8.8% in the past month.
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4 Reasons to Invest in Hercules Capital (HTGC) Stock Right Now
Hercules Capital, Inc. (HTGC - Free Report) is expected to continue to witness improvement in the top line, given the growing demand for customized financing. Moreover, backed by a solid balance sheet and liquidity position, the company is expected to keep enhancing shareholder value through efficient capital deployment activities. Hence, it seems to be a wise idea to add the stock to your portfolio now.
The Zacks Consensus Estimate for HTGC’s current-year earnings has been revised 5.9% upward over the past 30 days. This reflects that analysts are optimistic regarding the company’s earnings growth prospects. Hence, currently, HTGC sports a Zacks Rank #1 (Strong Buy).
Looking at its price performance, shares of the company have gained 0.5% in the past six months against the industry’s decline of 2.9%.
Image Source: Zacks Investment Research
Mentioned below are some key factors that make HTGC an attractive investment option now.
Earnings per Share (EPS) Strength: Hercules Capital has witnessed earnings growth of 2.5% over the last three to five years. Over the same period, the industry to which the stock belongs has declined 2.4%.
For 2022, the company’s earnings are projected to grow 10.9% For 2023, earnings are projected to increase 22.6%.
Revenue Growth: Hercules Capital’s total investment income has grown at a compound annual growth rate of 2.4% over the last three years (2019-2021). The uptrend continued in the first nine months of 2022.
Hercules Capital is a small participant in a market with huge growth prospects. In 2021, the company closed $2.6 billion in new debt and equity commitments. In the first nine months of 2022, it reported $2.48 billion in gross new debt and equity commitments. Thus, driven by the rise in demand for customized financing and a robust deal pipeline, total new commitments are expected to keep increasing, thereby positively impacting the top line.
HTGC is expected to deliver top-line growth of 11.5% for 2022 and 29% for 2023.
Superior Return on Equity (ROE): Hercules Capital’s current ROE is 12.47% compared with the industry average of 9.19%, reflecting the company’s better positioning than peers in efficiently using shareholders’ funds.
Efficient Capital Deployments: Hercules Capital’s capital deployment plan seems impressive. In order to maintain its RIC status, the company distributes approximately 90% of its taxable income. It announced a 2.9% hike in the quarterly distribution in October 2022, following a 6.1% hike in July, a 3.1% hike in October 2021 and a 3.2% hike in May 2019. Management plans to revisit its dividend policy at the end of every quarter and determine if any changes are required.
Thus, given a solid liquidity position, the company will likely be able to continue enhancing shareholder value through efficient capital deployment activities.
Other Stocks Worth a Look
A couple of other top-ranked stocks from the same space are Gladstone Investment Corporation (GAIN - Free Report) and Main Street Capital Corporation (MAIN - Free Report) .
Gladstone Investment has witnessed an upward earnings estimate revision of 21.5% for the current fiscal year over the past 30 days. Its share price has risen 12.8% over the last month. GAIN currently boasts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Main Street Capital also sports a Zacks Rank #1 at present. For the current year, it has witnessed an upward earnings estimate revision of 6.3% over the past 30 days. MAIN’s share price has increased 8.8% in the past month.