TRIN Stock: Why This 13.6%-Yielder Deserves a Closer Look

Trinity Capital: A Bright Spot in This Market?

If you’ve been paying attention to the stock market lately, it might feel like there aren’t any good opportunities out there. Everything looks either overvalued or too risky to touch—blue-chip stocks’ dividends are paltry and their stock prices are sky-high.

But that’s just on the surface. The reality is, there are actually many income opportunities still present. You just need the right lens to see them. The dividend gems are sitting in the quiet corners of the stock market where no one thinks to look.

One of those overlooked income plays is Trinity Capital Inc (NASDAQ:TRIN). With market cap of just $959.0 million, this business development company (BDC) is flying under the radar. It offers a double-digit dividend yield and provides exposure to some of the fastest-growing private companies in America…and TRIN stock could be setting up to skyrocket.

Just so you know, BDCs, or what we like to call “Alternative Banks” at Income Investors, provide financing to small- and mid-sized companies with which big banks don’t want to waste their time. And, by law, BDCs must distribute at least 90% of their ordinary taxable income to their shareholders. This results in frothy dividends for income investors.

What Does Trinity Capital Do?

Headquartered in Phoenix, Arizona, with additional offices in San Diego, Trinity Capital is a BDC that provides debt and equipment financing to venture-backed startups.

In simple terms, Trinity Capital acts like a banker to some of the most exciting private companies in America. However, instead of just giving out traditional loans like a bank (though it does this as well), this BDC offers tailored funding solutions.

Trinity Capital primarily focuses on tech, life sciences, and sustainability-focused companies. These businesses typically have high growth potential but aren’t profitable yet. In exchange for capital, Trinity Capital gets higher interest rates, warrants, and other related equity stakes in the companies.

As of March 31, 2025, the Alternative Bank has provided $4.3 billion in funding and holds $2.1 billion in assets under management and 403 investments. (Source: “Home,” Trinity Capital Inc, last accessed May 20, 2025.)

Charts Paint Bullish Outlook for TRIN Stock

There are several bullish developments I’ve flagged on the TRIN stock chart that shouldn’t be ignored.

First, TRIN stock found a lot of support around its 200-day moving average (MA) in the midst of the sell-off on the broader market between February and April. This tells me that the long-term trend remains intact, and investors could be using this MA as sort of a “buying” point.

Also, TRIN stock has crossed above it 50-day MA again. This indicates that the short-term trend is pointing upwards now, too. The stock price had briefly dropped below this MA, hinting that investors were turning sour.

Lastly, on the chart, pay attention to the moving average convergence-divergence (MACD) momentum indicator. The MACD is trending upwards, about to enter positive territory. At its core, the momentum indicator is saying that buyers are starting to be in control and are increasing in number, so they could take TRIN stock higher.

Chart Courtesy of StockCharts.com

Trinity Capital’s financial performance makes a bullish case for TRIN stock going higher as well.

On May 7, the BDC reported its financial results for the first quarter of 2025. There were encouraging data across the board. Here’s a synopsis:

• Total investment income was $65.4 million, up 29.5% year over year
• Net investment income (NII) was $32.4 million, or $0.52 per basic share
• 15.5% return on average equity (ROAE)
• 7.1% return on average assets (ROAA)
• Total gross investments funded were $220.4 million for the quarter: $94.8 million in six new portfolio companies and $125.6 million in 19 existing portfolio companies (source: “Trinity Capital Inc. Reports First Quarter 2025 Financial Results,” Trinity Capital Inc, May 7, 2025.)

All of this is nothing but good news for TRIN stock.

Robust Dividends for Income Investors

Now for the main part that income investors should pay attention to: dividends.

TRIN stock currently pays a quarterly dividend of $0.51 per share, which works out to $2.04 per share on an annual basis or a dividend yield of 13.6%.

Let that sink in for a second. Keep in mind that this isn’t a risky penny stock or a collapsing turnaround story. This is a cash-generating company with a solid portfolio paying out one of the highest yields in the market.

It gets better: Trinity Capital has consistently paid and increased its dividend since going public. In fact, the first quarter of 2025 marked the 21st consecutive quarter of a consistent or increased regular dividend for TRIN stockholders.

And here’s the kicker: if interest rates remain elevated or even just flatten, Trinity Capital could continue earning high yields on its new investments. That gives this Alternative Bank an ample amount of cash flow to grow its dividends even more.

The Lowdown on TRIN Stock

In a market filled with overvalued tech stocks and low dividend-payers, Trinity Capital offers an opportunity to income investors like no other: strong income, growth potential, and a management team that’s executing well.

TRIN stock isn’t flashy. It’s not what you will hear about in the financial press. But it’s exactly the kind of stock that long-term income investors should have on their radar.

Just a reminder, with TRIN stock, income investors get

• A 13.6% dividend yield
• Growing net investment income
• A well-diversified portfolio in high-growth sectors
• A strong return on equity
• A solid dividend track record with upside potential

Here’s something else worth noting: institutional investors already hold a meaningful stake in TRIN stock. As per the most recent data, 29.01% of all outstanding shares were owned by institutional investors. Van Eck Associates Corporation, Melia Wealth LLC, and Two Sigma Advisers, LP are the biggest holders of TRIN stock. (Source: “Holders,” Yahoo! Finance, last accessed May 20, 2025.)