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HTGC - Hercules Capital: A Premium Company But Better To Wait Until Interest Rates Decrease
Hercules Capital Inc.
2024-06-07 09:00:48 ET
Summary
Hercules Capital has displayed favorable financial performance in the tech and life sciences industry, with a large lending platform and deep expertise.
The company has a premium over its peers in the stock market, and its price-to-NAV is 1.59, the highest in the last four years.
The high valuation is partly due to the current high interest rates. When rates decrease, net investment income will fall by about 30%.
Lower net investment income means the possibility of lower dividend distributions and a downfall in the stock price.