You can’t really go wrong with dividend stocks. These equities provide a stable, long-term income stream, one that supplements the return from share appreciation. And even if the share price goes down, you can still make bank via the dividend. It’s a solid advantage to add to any stock portfolio – and can be made even better by the high-yield dividends, ones that can provide yields of 9% or better.
For investors seeking out these high-yield dividend payers, the street’s analysts are on the job. They’ve been sorting through the ranks of div stocks, and tagging some of the 9%+ high-yield payers as Buys right now.
We’ve used the TipRanks platform to pull up the details on two of these picks. Let’s dive in.
Hercules Capital (HTGC)
We’ll start with Hercules Capital, a BDC, or business development company. Hercules focuses its work on emerging companies, particularly those with a bent toward the sciences and technology – life sciences, sustainable and renewable tech, and SaaS finance tech. Hercules is a leading specialty finance provider in this niche, supporting a venture capital-backed clientele with access to credit services and growth capital financing.
Since its founding in 2003, Hercules has provided funding for over 660 companies, to a total of $21 billion-plus in capital commitments. The company currently has over $4.6 billion in assets under management.
On the dividend side, Hercules has a long-standing commitment to keeping up capital returns to shareholders. The company’s current regular dividend, last declared on October 28 for payment this coming November 20, was set at 40 cents per common share and was supplemented by an 8 cent per share special dividend. The combined dividend payment, of 48 cents per common share, annualizes to $1.92 per share and gives a strong forward yield of 9.75%.
That dividend is supported by Hercules’ financial results, which were reported at the end of October for 3Q24. The company’s total investment income in the quarter was reported as $125.25 million, stated by management to be a company quarterly record. The investment income figure was up 7.3% year-over-year, although it missed expectations by $2.9 million. At the bottom line, Hercules had a quarterly net investment income of 51 cents per share.
This BDC has caught the attention of JMP’s Brian McKenna, an analyst ranked in the top 2% of Wall Street stock experts, who is impressed by Hercules’ business strength. McKenna writes of the firm, “Hercules continues to demonstrate its leading position within the venture lending space, and we are quite pleased again with the strength of quarterly results as well as the trajectory of the business into year-end. Lower base rates and tighter spreads will clearly be somewhat of a headwind within the P&L moving forward, but we also believe the company has demonstrated its ability to consistently deliver ROEs in the mid-to-upper teens through the cycle. So, while the stock trades at a healthy valuation multiple on paper, we believe underlying results and the outlook for the business more than justify this multiple.”
