HRZN,Horizon Technology Finance Corporation is a business development company focusing on technology companies as the name suggests. ” Business Development Company (“BDC”) is a form of unregistered closed-end investment company in the United States that invests in small and mid-sized businesses. This form of company was created by Congress in 1980 as amendments to the Investment Company Act of 1940. Publicly filing firms may elect regulation as BDCs if they meet certain requirements of the Investment Company” -Wikipedia
BDCs must distribute 90% of earnings to shareholder to get tax benefits.
Here is market segment where HRZN operates:
From company presentation at investor relations
Stock price history
Company website history page
Price of the company has declined about every year but $8.38 of dividends have been paid during the years. If shares were originally bought at $16 at launch, this means about 5% yearly return. Not very impressive but still positive return .
Shares are currently trading at $13 range. Last quarter net income per share was $0.38. Multiplying this result over four months would mean $1.52 per share. From here we get projected price-to-earnings ratio (PE) of 8.55 which is looking good and also leaves some room for earning fluctuations for rest of the year. Price per book is about 1.0 or little under. Update for Q2 result comes 3rd of August.
Outlook and positions held
I hold shares in HRZN with average price of $10.36. I would also be happy to buy more at 13 but I am currently increasing REIT position in portfolio and dividend money goes to those stocks.
Estimated and released results from yahoo finance. Estimate for Q2 result is 0.34 per share. Estimates have been quite accurate as seen in the figure so everything is looking good.
Although company has not been good valuation holder, it is solid high yield investment with solid dividend stream. Companies like these provide good income stream which you can direct also to other stocks and helps to eat away the debt if you have leveraged portfolio.