12% Yields in Tech Lending: Why Hercules Capital Edges Out Trinity Capital for Income Investors
Hercules Capital and Trinity Capital, both yielding around 12%, now trade at identical 1.3x net asset value multiples. One analyst gives Hercules Capital a slight advantage, though Trinity Capital may appeal to different risk appetites. The comparison comes amid sector headwinds from AI-driven disruption in software businesses.
What to watch: Compare the portfolio compositions of HTGC and TRIN to see which has less exposure to software companies vulnerable to AI disruption. Track NAV changes quarter over quarter as a signal of underlying asset quality. Consider whether the 12% yield is sustainable by examining dividend coverage ratios and non-accrual rates. For new buyers, the identical 1.3x NAV multiple means the relative value is locked in—future performance will depend on earnings surprises.
Watch: Compare the portfolio compositions of HTGC and TRIN to see which has less exposure to software companies vulnerable to AI disruption. Track NAV changes quarter over quarter as a signal of underlying asset quality. Consid
