Horizon Technology Finance Corp (HRZN) is a company that is focused on financing solutions by providing loans, as well as investing in a wide range of technologies such as life science, healthcare information and services, and cleantech companies. Since 2004, it has been involved in many millions of dollars worth of transactions in more than 130 companies. It often provides senior and subordinated venture loans, bridge loans, senior revolving loans, equipment loans and more. A typical transaction for Horizon often runs between $2 million to $25 million.
This company makes investments in a number of tech-related industries including cloud computing, communications, data storage, Internet and media, networking, software, drug discovery and delivery, medical devices, specialty pharmaceuticals, medical information technology, alternative energy, green building materials, water purification and many others. This diversification reduces risks for the company and for shareholders. It has investments in companies like Brix Networks, Bitband, Hatteras Networks, Snagajob.com, Concentric Medical, and many others.
Insiders have also recently bought the stock: On September 5, 2012, Robert Pomeroy (an officer), purchased 600 shares in a transaction valued at nearly $10,000. Just a day before that, Edmund Mahoney (a director), bought 500 shares in a transaction valued at $8,270. On September 3, Christopher Woodward (a director), bought 500 shares in a transaction valued at $8,295. On August 28, David Swanson (a director), bought 2,000 shares in a transaction valued at $33,000, and there have been other insider buys throughout 2012.
With interest rates at very low levels, it's nearly impossible to earn a meaningful return through a traditional savings account, and that is why many investors have turned to dividend stocks. The problem is that many well-known dividend stocks have seen a significant run and now trade at or near a 52-week high. This has pushed the yields down to levels that are less than exciting, especially when you consider the inherent risks of owning stocks.
For example, Chevron Corporation (CVX) trades at $114, (a 52-week high), and it now yields just 3.2%, Johnson & Johnson (JNJ) trades at $68 per share (just barely below the 52-week high), and yields 3.6%. General Electric Company (GE), which also does a significant amount of business lending through its finance division, offers a yield of 3.1%. If you are going to invest in a stock, it certainly makes sense to get paid for the risk.
Horizon Technology Finance shares could provide investors with gains through the dividend of about 11%, in a single year. It could take a stock that yields about 3%, (such as the ones mentioned above) almost four years to provide similar gains, and that is why owning high-yield stocks like Horizon Technology Finance, can make so much sense.
Here are some key points for HRZN:
- Current share price: $16.14
- The 52 week range is $14.02 to $17.31
- Earnings estimates for 2012: $1.43 per share
- Earnings estimates for 2013: $1.57 per share
- Annual dividend: $1.80 per share, which yields about 11%
Data is sourced from Yahoo Finance.
Disclaimer: No guarantees or representations are made. Hawkinvest is not a registered investment advisor and does not provide specific investment advice. The information is for informational purposes only. You should always consult a financial advisor.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.