HTGC - Horizon Technology: A 10% Yield For Long-Term Investors

2024-01-23 05:23:33 ET

Summary

• Horizon Technology Finance is a well-run BDC that invests in neglected technology and life sciences companies.
• The BDC focuses on a small number of industries, providing secured loans to venture capital-backed companies.
• HRZN has seen a strong trend in net investment income in FY 2023. Last week's portfolio update shows that the portfolio is growing.
• Shares are trading at a significant premium to NAV, but the dividend is well-supported by NII.

Horizon Technology Finance ( HRZN ) is a well-run BDC that invests in a small number of core industries that are historically neglected by the banking community. The BDC runs a tech-focused investment strategy and has seen double-digit net investment income growth in the last year. Although I expect weaker NII growth in FY 2024, Horizon Technology has very strong dividend coverage. The BDC's shares currently provide dividend investors with a very well-supported 10% yield. Horizon Technology's shares are trading at a high premium to net asset value, but the risk profile is favorable for investors....

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