### High-Yield Dividend Stocks: Spotlight on Hercules Capital and Ares Capital Corp.

Dividend stocks are a staple for investors seeking a stable and reliable income stream. Beyond the potential for share price appreciation, these equities provide the added benefit of regular dividend payments, making them a robust addition to any investment portfolio. High-yield dividend stocks, those offering yields of 9% or more, are particularly attractive. Let’s examine two such stocks that analysts have recently endorsed as strong buy options.

#### Hercules Capital: Leading in Venture Lending

Hercules Capital, a business development company (BDC), stands out in the sector by focusing on emerging tech and science companies, including those in life sciences, renewable tech, and SaaS finance tech. Since its inception in 2003, Hercules has supported over 660 companies with more than $21 billion in capital commitments and currently manages assets exceeding $4.6 billion.

Hercules has maintained a solid track record of returning capital to shareholders. Recently, it declared a regular dividend of 40 cents per share, supplemented by an 8 cent special dividend. This combined dividend of 48 cents per share annualizes to $1.92, resulting in a forward yield of 9.75%.

Financially, Hercules reported a total investment income of $125.25 million for Q3 2024, setting a quarterly record despite missing expectations by $2.9 million. The net investment income reached 51 cents per share. Brian McKenna of JMP lauded Hercules for its consistent performance and strong position in venture lending, affirming the company's ability to deliver robust returns through various market cycles.

#### Ares Capital Corp.: A Strong Player in Small Business Financing

Ares Capital Corp., another prominent BDC, is dedicated to providing credit and financing services to small and mid-sized businesses in the US. With 20 years of experience, Ares has built a diversified portfolio valued at $25.9 billion as of September 30, spread across 535 client companies supported by 240 private equity sponsors.

The company’s investment strategy is heavily weighted toward first lien senior secured loans, representing 52.8% of its portfolio. Second lien senior secured loans and preferred equity securities comprise 10.6% and 10.4% of the portfolio, respectively. Leading sectors for Ares’ investments include software and services (25.4%), health care services (12.8%), and commercial and professional services (10.7%).

Ares Capital’s current dividend stands at 48 cents per share, a level maintained for nine consecutive quarters, yielding 9% annually. For Q3 2024, Ares reported an investment income of $775 million, reflecting an 18% year-over-year increase and exceeding forecasts by $1.69 million. Despite a slight miss in non-GAAP earnings per share at 58 cents, RBC analyst Kenneth Lee remains confident in Ares' credit performance and risk management capabilities, maintaining an outperform rating on the stock.

In summary, Hercules Capital and Ares Capital Corp. are two high-yield dividend stocks that provide substantial returns and strong financial performance, making them attractive options for investors seeking stable income and growth potential.