Well covered — read both yields. The card shows Hercules two ways on purpose: 9.75% on the regular $0.40 quarterly dividend, 11.46% only when the $0.07 quarterly supplemental is included. Q2 2026 net investment income of $0.50 a share covers the base dividend 125%, and NAV per share rose 2.1% in the quarter to $12.15 — the yield is real, but only the regular portion is the promise.
Key risk: Venture-credit cycles — Hercules lends to venture-backed companies, so a funding winter or a wave of borrower failures would cut NII and the supplemental first, and the base dividend second.
Changes if: NII falls short of the $0.40 base dividend, or NAV starts falling quarter over quarter. Supplementals never count toward this verdict either way.
- ✓Coverage check: Q2 2026 NII of $0.50 a share against a $0.40 base dividend — 125% coverage; the $0.28 annual supplemental for 2026 ($0.07 a quarter) is declared separately and is not part of the base promise.
- !Yield check: Anyone quoting only the 11.46% figure is selling. The House scores Hercules on the regular 9.75% — $0.40/qtr × 4 at the $16.41 close on Oct. 23, 2026.
- ✓NAV check: NAV per share of $12.15 at June 30, 2026, up 2.1% quarter over quarter, with a $149.9 million undistributed-earnings spillover ($0.82 a share) carried into 2026.
What this grade doesn't say: It screens the dividend only — covered, real, compounding. It says nothing about valuation or price: a well-covered payer can still be overpriced, and its price can still fall.