Business Development Stocks Bounce (HTGC, TCAP, TCRD, PSEC, ARCC)
Shares of Hercules Technlgy Growth (HTGC), the private equity and venture capital firm, are surging 3% after the company reported first-quarter earnings of 23 cents a share, inline with analysts’ estimates, on revenue of $19.2 million, which easily beat the consensus estimate of $17.8 million. The company said its distributable net operating income jumped 73.4% to $10.5 million and Hercules declared its twenty-third consecutive dividend.
The positive news from Hercules is helping fuel a rally in the Business Development Company Stocks Index, which is up 1.3% today.
Triangle Capital (TCAP) is leading the rally with a 4% gain after the stock was upgraded to “outperform” from “neutral” at Robert W. Baird. The research firm raised its price target on shares of Triangle Capital to $21 from $20, noting that an entry point just north of $18 is attractive. Baird believes business development firms are an attractive investment opportunity in the current lower interest rate environment. Davenport raised its rating on Triangle Capital to “buy” from “neutral.”
THL Credit (TCRD) with a yield of 6.9%, based on past distributions is up 3% today. Prospect Capital (PSEC) is up 1%. That stock sports a dividend yield of 10.4%, based on past distributions. Ares Capital (ARCC) is also up 1% and currently features a dividend yield of 8.3%, based on past distributions.
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