24/7 Wall St. Quick Read Plains All American Pipeline (PAA) transports crude oil and natural gas liquids through fee-based contracts that generate steady cash flow regardless of commodity prices. Hercules Capital (HTGC) offers a 10.23% forward dividend yield and received a Baa2 investment-grade rating upgrade from Moody’s. TORM (TRMD) benefits from Europe’s shift to North American and Middle Eastern energy sources, which requires tanker transport over longer distances. If you’re thinking about ret ...

Core Viewpoint - Many investors believe that further interest rate cuts in December are guaranteed [1] Group 1 - The expectation of interest rate cuts reflects a broader sentiment in the investment community regarding economic conditions [1]

Core Insights - Hercules Capital (HTGC) achieved record levels in total investment income and investment funds during the third quarter, indicating a strong value proposition for income-seeking investors despite its above-average valuation [1] Group 1 - Hercules Capital reported new records in total investment income and investment funds for the third quarter [1] - The company's performance highlights its attractiveness for investors looking for income [1] - The valuation of Hercules Capital is noted to be above average, which may influence investor decisions [1]

Core Insights - Hercules Capital (HTGC) achieved record levels in total investment income and investment funds during the third quarter, indicating a strong value proposition for income-seeking investors despite an above-average valuation [1] Financial Performance - The company reported new records in total investment income and investment funds in the third quarter [1]

Core Insights - iREIT+HOYA Capital focuses on income-producing asset classes, aiming for sustainable portfolio income, diversification, and inflation hedging [1][2] - The investment group emphasizes high-yield, dividend growth investment ideas, targeting dividend yields up to 10% [2] Investment Strategy - The market is viewed as a place for stocks rather than a traditional stock market, indicating opportunities for both bull and bear markets [2] - The focus is on defensive stocks with a medium- to long-term investment horizon [2] Portfolio Offerings - iREIT+HOYA Capital provides research on various asset classes including REITs, ETFs, closed-end funds, preferreds, and dividend champions [2] - The service aims to help investors achieve dependable monthly income and portfolio diversification [2]

Core Insights - iREIT+HOYA Capital focuses on income-producing asset classes, aiming for sustainable portfolio income, diversification, and inflation hedging [1][2] - The investment strategy emphasizes high-yield, dividend growth opportunities, particularly in defensive stocks with a medium- to long-term horizon [2] Group 1: Investment Strategy - The service provides investment research on various asset classes including REITs, ETFs, closed-end funds, preferreds, and dividend champions [2] - Income-focused portfolios target dividend yields up to 10%, catering to investors seeking dependable monthly income [2] Group 2: Market Perspective - Stocks are perceived as expensive on a market-cap-weighted basis, yet opportunities for bargains exist in both bull and bear markets [2] - The approach is characterized as a market for stocks rather than a traditional stock market, highlighting the importance of stock selection [2]

Core Insights - Hercules Capital, Inc. (NYSE:HTGC) is recognized as one of the 15 Extreme Dividend Stocks to Buy According to Hedge Funds [1] - Compass Point upgraded Hercules Capital from Neutral to Buy, increasing its price target to $19.50 from $19.25 following strong Q3 results [2] Financial Performance - In Q3 2025, Hercules Capital reported record total investment income of $138.1 million and net investment income of $88.6 million, equating to $0.49 per share [3] - The company ended the quarter with over $1 billion in liquidity and no significant near-term debt maturities [3] Investment Activity - More than half of the company's gross fundings for the quarter occurred in the final month, indicating strong momentum into Q4 [4] - As of October 28, 2025, the investment team completed $554.4 million in new commitments and funded $237.4 million [4] Company Overview - Hercules Capital is a specialty finance firm that provides senior secured loans to venture capital-backed businesses in the technology and life sciences sectors [4]

Core Industry Insights - The Zacks SBIC & Commercial Finance industry is facing margin compression and lower investment income due to declining interest rates, as most loans are tied to floating rates [5][6] - Asset quality is at risk as prolonged high rates may strain borrowers' ability to repay, although initial support from stimulus packages helped mitigate delinquency rates post-COVID-19 [7][8] - Regulatory changes, particularly the amendment to the Investment Company Act of 1940, have provided funding flexibility and growth opportunities for industry players [9][10] Industry Performance - The Zacks SBIC & Commercial Finance industry has underperformed the S&P 500 and the broader finance sector, with a collective loss of 13% over the past year compared to gains of 14.2% for the S&P 500 [15] - The industry's Zacks Industry Rank is 209, placing it in the bottom 14% of over 250 Zacks industries, indicating a discouraging earnings outlook [11][12][13] Valuation Metrics - The industry has a trailing 12-month price-to-tangible book (P/TB) ratio of 0.96X, significantly lower than the S&P 500's ratio of 12.55X, indicating a substantial discount compared to the market [17][18] Company Highlights - **Ares Capital Corp. (ARCC)**: A specialty finance firm focused on U.S. middle-market companies, with a market cap of $14.5 billion and total debt of $15.6 billion as of September 30, 2025. The company has seen growth in total investment income and is expected to continue this trend [19][21] - **Hercules Capital, Inc. (HTGC)**: A specialty finance company providing venture capital to technology and life science firms, with a market cap of $3.3 billion. The company maintains a robust balance sheet and is expected to benefit from rising demand for customized financing [22][24][25] - **Runway Growth Finance Corp. (RWAY)**: Focused on providing senior secured loans to growth-stage companies, with a market cap of $357.4 million. The company has posted steady growth in total investment income and is well-positioned to sustain this momentum [26][28][29]

Core Insights - The article emphasizes the importance of a hybrid investment strategy that combines classic dividend growth stocks with Business Development Companies, REITs, and Closed End Funds to enhance investment income while achieving total returns comparable to traditional index funds [1]. Group 1: Investment Strategy - A solid base of classic dividend growth stocks can be complemented with other asset types to create a balanced portfolio [1]. - The hybrid system developed allows for capturing total returns that align with the performance of the S&P index [1]. Group 2: Investment Focus - The focus is on high-quality dividend stocks and assets that provide potential for long-term growth and significant income generation [1].

Core Insights - The article emphasizes the importance of a hybrid investment strategy that combines classic dividend growth stocks with Business Development Companies, REITs, and Closed End Funds to enhance investment income while achieving total returns comparable to traditional index funds. Group 1: Investment Strategy - A solid base of classic dividend growth stocks can be complemented with other asset types to create a balanced portfolio that maximizes income potential [1] - The hybrid system developed allows for capturing total returns that align with the performance of the S&P index [1] Group 2: Market Opportunities - The focus is on identifying high-quality dividend stocks and assets that provide long-term growth potential, which can significantly contribute to bill-paying capabilities [1]