Hercules Capital (NYSE: HTGC) is one of 565 public companies in the “Closed End Funds” industry, but how does it compare to its competitors? We will compare Hercules Capital to similar businesses based on the strength of its valuation, analyst recommendations, earnings, dividends, profitability, risk and institutional ownership.

Dividends

Hercules Capital pays an annual dividend of $1.24 per share and has a dividend yield of 9.6%. Hercules Capital pays out 134.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Closed End Funds” companies pay a dividend yield of 8.8% and pay out 87.0% of their earnings in the form of a dividend.

Insider & Institutional Ownership

42.6% of Hercules Capital shares are held by institutional investors. Comparatively, 23.2% of shares of all “Closed End Funds” companies are held by institutional investors. 3.9% of Hercules Capital shares are held by company insiders. Comparatively, 3.5% of shares of all “Closed End Funds” companies are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Hercules Capital and its competitors revenue, earnings per share (EPS) and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Hercules Capital $187.39 million $140.30 million 14.02
Hercules Capital Competitors $57.58 million $38.86 million -0.14

Hercules Capital has higher revenue and earnings than its competitors. Hercules Capital is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Volatility and Risk

Hercules Capital has a beta of 0.83, suggesting that its stock price is 17% less volatile than the S&P 500. Comparatively, Hercules Capital’s competitors have a beta of 0.56, suggesting that their average stock price is 44% less volatile than the S&P 500.

Profitability

This table compares Hercules Capital and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hercules Capital 38.69% 12.93% 6.76%
Hercules Capital Competitors 25.10% 6.35% 4.91%

Analyst Recommendations

This is a summary of current recommendations for Hercules Capital and its competitors, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hercules Capital 1 1 5 0 2.57
Hercules Capital Competitors 345 1483 1510 26 2.36

Hercules Capital presently has a consensus price target of $14.79, suggesting a potential upside of 14.62%. As a group, “Closed End Funds” companies have a potential upside of 40.63%. Given Hercules Capital’s competitors higher possible upside, analysts plainly believe Hercules Capital has less favorable growth aspects than its competitors.

Summary

Hercules Capital beats its competitors on 12 of the 15 factors compared.

Hercules Capital Company Profile

Hercules Capital, Inc. is a specialty finance company. The Company is an internally managed, non-diversified, closed-end investment company. The Company focuses on providing senior secured venture growth loans to venture capital-backed companies in a range of technology, life sciences, and sustainable and renewable technology industries. The Company’s investment objective is to maximize its portfolio total return by generating current income from its debt investments and capital appreciation from its warrant and equity-related investments. The Company’s primary business objectives are to increase its net income, net operating income and net asset value (NAV) by investing in structured debt with warrants and equity of venture capital-backed companies in technology-related industries with attractive current yields and the potential for equity appreciation and realized gains. The Company focuses its investments in companies active in the technology industry sub-sectors.

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