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3 Reasons to Buy Hercules Capital (HTGC) Stock Right Now

Since Donald Trump's election victory, finance stocks have been flying high. This is because investors are expecting lesser regulations and better interest-rate environment, which are favorable for the finance industry as a whole.

Therefore, adding a few finance stocks to your portfolio now should be a wise decision. We bring to you Hercules Capital, Inc.HTGC , whose strong liquidity position and robust loan origination should help it ride the rally.

Shares of the company have grown 16.2% year to date, outpacing the 11.5% gain for the Zacks categorized Small Business Investment Companies & Commercial industry.

Looking at the estimate revision trend, the company's earnings estimates for the current year have been revised nearly 1% upward, over the past 60 days. As a result, the stock carries a Zacks Rank #2 (Buy). This indicates that there is still upside left for this stock.

Promising Fundamentals

Earnings Per Share (EPS) Strength : Hercules Capital's EPS has grown 19.7% annually over the last three to five years.

Earnings growth is expected to continue in the near term as well. The company's projected EPS growth (F1/F0) is 19.2% for 2016 and (F2/F1) 6.3% for 2017.

Revenue Growth : Hercules Capital's total investment income has grown at a CAGR of 6.1%, over the last three years (2013-2015).

Moreover, the company is expected to deliver sales growth of 10.1% for 2016 and 11.2% for 2017.

Superior Return on Equity (ROE) : Hercules Capital's current ROE is 10.5%, compared with the industry average of 9.7%, reflecting the company's better positioning in terms of efficiently using equity financing.

Other Stocks to Consider

Some other stocks in the same space worth considering include CM Finance Inc. CMFN , Main Street Capital Corporation MAIN and NewStar Financial, Inc. NEWS .

CM Finance has witnessed an upward earnings estimate revision of 2.6% for the current year, over the past 60 days. Its share price has risen 3.6%, in the last six months. It currently boasts a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

Main Street Capital carries a Zacks Rank #2. For the current year, it has witnessed an upward earnings estimate revision of 2.8%, over the past 60 days. Its share price has increased 12.1%, in the last six months.

NewStar Financial also carries a Zacks Rank #2. It has witnessed an upward earnings estimate revision of 18.6% for the current year, over the past 60 days. Its share price has risen 9.5%, in the last six months.

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HERCULES CAP (HTGC): Free Stock Analysis Report

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CM FINANCE INC (CMFN): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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