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Hercules Capital Inc, with the ticker HTGC, is a small-cap asset management company operating in the financial services business sector. This is the second of five financial services candidates competing for the forty-third slot in the Viital folio. It is my first report on Hercules Capital for my Viital portfolio or any of my previous six portfolios.

Hercules Capital Inc is a specialty finance company engaged in providing senior secured loans to high-growth, venture capital-backed companies in a variety of technology, life sciences, and sustainable and renewable technology industries. 

As a business development company, it invests primarily in structured debt with warrants and, to a lesser extent, in senior debt and equity investments. 

The firm formerly known as Hercules Technology Growth Capital, Inc. 

Hercules Capital, Inc. was founded in December 2003 and is based in Palo Alto, California with additional offices in Connecticut; Boston, Massachusetts; San Diego, California; Westport, Connecticut; Elmhurst, Illinois; Santa Monica, California; McLean, Virginia; New York, New York; Radnor, Pennsylvania; and Washington, District of Columbia and London, United Kingdom.

Three key data points gauge any dividend equity or fund such as Hercules Capital Inc.

(1) Price

(2) Dividends

(3) Returns

Those three basic keys best tell whether any company has made, is making, and will make money. 
 

HTGC Price

Hercules’s price per share was $14.51 as of yesterday's market price. One year ago its price was $17.22. Thus, HTGC share price fell $2.71 or about 15.7% in the past year. 

If Hercules’s stock trades in the range of $12.00 to $20.00 this next year, its recent $14.51 share price might rise by $2.49 to reach $17.00 by next year. My $2.49 upside estimate is based on the median of one-year price targets set by nine analysts covering Hercules Capital. Their valuation was $0.78 higher,
 

HTGC Dividends

Hercules’s most recently declared quarterly dividend of $0.33 was paid May 24th, to shareholders on record as of May 16th.  

Since November 17, 2005, Hercules has paid variable quarterly dividends. The current forward looking annual dividend of $1.32 equates to an annual yield of 9.10% as of yesterdays $14.51 share price.
 

HTGC Returns

Adding the $1.32 Hercules annual forward-looking dividend to my estimated one-year price upside estimate of $2.49 shows a $3.81 potential gross gain, per share, to be reduced by any costs to trade HTGC shares.  

At Friday's $14.51 closing price, a little over $1000 would buy 69 shares.

A $10 broker fee (if charged) would be paid half at purchase and half at sale and might cost us about $0.15 per share.

Subtract that maybe $0.15 brokerage cost from my estimated $3.81 gross gain estimate per share results in a net gain of $3.66 X 69 shares = $252.54, for a 25.25% net gain including a 9.1% forward looking annual dividend yield. 

Over the next year our $1K investment in HTGC shares should generate $91.00 in cash dividends. Of course, a single share of HTGC stock bought at Friday's $14.51 price is over six times less than the dividend income from our $1000.00 investment. 

So, by my dogcatcher ideal, this a prime time to pick up Hercules Capital Inc shares based on their forward looking dividends for the year 2022. The forthcoming annual dividend from $1K invested is 6.27 times more than yesterday’s single share price. Consider yourself alerted. It's a sign. 

All of the estimates above are speculation based on the past history of Hercules Capital Inc. Only time and money invested in this stock will determine its market value.

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