HTGC - Two Top-Tier BDCs To Buy On A Pullback

2024-07-30 09:00:00 ET

Summary

• The BDC sector has outperformed the REIT sector over the past two years. With interest rate cuts anticipated in September, some BDCs have already seen a slight pullback in share price.
• Hercules Capital and Trinity Capital are top-tier BDCs to consider buying on a potential pullback due to their strong performance and conservative financial management.
• Despite the potential decline in BDC sector valuations, Hercules Capital and Trinity Capital offer strong growth potential and should be considered for portfolio diversification.
• Both BDCs saw double-digit growth in their top and bottom lines year-over-year. Their balance sheets are also solid, with investment-grade credit ratings and manageable debt over the next two years.

Introduction

The BDC sector has done well over the past two years, offsetting the decline in my portfolio as a result of volatility in the REIT sector. One of my top performers has been Capital Southwest ( CSWC ), a BDC that has outperformed many of its peers....

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