HTGC 1st Half Review 2024

Performance: 21.0%

Dividend received: HTGC paid a dividend of USD 0.48c per share including a special dividend
Full year weighted portfolio Forecast:  28.8pc

Summary: HTGC has delivered a total return of more than 21% this year so far. HTGC has performed incredibly well, returning close to 34% after distributions.

The most recent Q1 earnings were released at the start of May, total income from investments was $121.6 million, up 15.7% from the previous year. HTGC is still taking advantage of the higher interest rate environment, despite slightly falling short of expectations.

With the most recent quarterly dividend of $0.40 per share declared, the dividend yield is 7.5% as of right now. HTGC has additionally announced a $0.08 per share supplemental distribution in addition to this base distribution. As stated earlier, $0.50 per share was the net investment income for the quarter. This indicates that NII per share comfortably covers 125% of the base distribution. The supplemental is included, but even then, only 104% of the distribution is covered by NII. This leaves them with some excess capital, which they can use to fund future increases in distributions by reinvesting it back into the portfolio.

In spite of the high initial yield, HTGC has been able to provide shareholders with steadily rising base distributions. The dividend has grown at a compound annual growth rate (CAGR) of 5.06% during the past five years. In just three years, the dividend has grown at a compound annual growth rate (CAGR) of 7.7%. Most notably, the dividend has grown at a compound annual growth rate (CAGR) of 3.08% over the past ten years, demonstrating HTGC’s ability to adjust to shifting interest rate environments while still rewarding shareholders.

We maintain HTGC in the model HY portfolio.