As Small Caps Rally, These 3 Finance High-Yielders Could Have Further Upside

Zinger Key Points
  • Hercules Financial has approximately $2.9 billion in assets under management and has partnered with over 590 innovative companies.
  • Since its inception in 2011, Sixth Street Specialty Lending has originated at least $22 billion aggregate principal amount of investments.
As Small Caps Rally, These 3 Finance High-Yielders Could Have Further Upside

In the past month with the Russell 2000 index up roughly 7%, as compared to the S&P 500 index up nearly 4.8%, it is evident that small cap stocks are leading the charge in this bear market rally. The WisdomTree U.S. SmallCap Dividend Fund DES has seen a nice rally in the past month surging by more than 9%.

Small cap dividend stocks are an interesting investment, since sharing their distributions with shareholders is less common during the younger stages of a firm. When a small cap does offer dividends, it can be a positive sign the firm is profitable and fundamentally sound.

Another important factor when investing in small cap stocks is they tend to be more volatile than the market. If the economy is truly in a bear market rally, investing in a small cap to reap the volatile returns, as well as earning a high yield, could be a great strategy.

Also Read: Looking For A Short Squeeze Candidate: 2 Small Caps With Soaring Yields And Are Heavily Shorted

Learn more about three small cap stocks in the financial industry with high yields.

Hercules Capital Inc HTGC is offering a dividend yield of 10.21% or $1.44 per share annually, making quarterly payments, with a consistent track record of increasing its dividends for three consecutive years.

Hercules is the largest business development company engaged in providing senior secured loans to high-growth, venture capital-backed companies in various technology, life sciences and sustainable and renewable technology industries.

Hercules has approximately $2.9 billion in assets under management and has partnered with more than 590 innovative companies in the technology, life sciences, sustainable and renewable, and special situations verticals, since 2003. Two of these firms include zero-emission electric bus maker Proterra Inc PTRA and aerospace and launch service provider Rocket Lab USA Inc RKLB.

Sixth Street Specialty Lending Inc. TSLX is offering a dividend yield of 9.28% or $1.68 per share annually, making quarterly payments, with an inconsistent track record of increasing its dividends.

Sixth Street Specialty Lending is a specialty finance company focused on providing flexible financing solutions to middle-market companies located in the U.S.

Since its inception in 2011, Sixth Street has originated at least $22 billion aggregate principal amount of investments and has approximately $60 billion in assets under management.

Sixth Street’s portfolio had a fair value of at least $2.5 billion invested across 94 portfolio companies, including Staples and JCPenney, which is partially owned by Simon Property Group SPG.

Hanmi Financial Corp HAFC is offering a dividend yield of 3.81% or $1.00 per share annually, making quarterly payments, with a track record of increasing its dividends once in the past year.

Hanmi Financial was established as the first Korean American bank in 1982, helping fellow Korean American immigrants fulfill their dreams.

President and CEO Bonnie Lee mentioned in the third quarter press release, “Our strategic initiatives to diversify our business are fueling growth across our loan and lease portfolio in an increasingly competitive lending environment.”

In the third quarter, loans receivable grew to $5.80 billion, up 2.6% sequentially from the end of the second quarter and 12.6% from year-end as loan production returned to more historical levels at $492.3 million for the third quarter.

Photo: Shutterstock

 

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