The S&P 500 is set for another double-digit gain in 2025, but 2026 brings uncertainty. Dividend stocks are a stable choice amidst market volatility. Business development companies are appealing as more businesses borrow. Unemployment in the U.S. is at 4.6%, with concerns rising about an AI bubble.

Investors are considering business development companies (BDCs) for dividends amidst economic uncertainty. BDCs provide debt to complement equity funding for small businesses. With potential interest rate reductions, BDC profits and dividends might be impacted. Recent trends show accelerated BDC deal flow, especially in the tech sector.

Hercules Capital (NYSE: HTGC) is a top BDC pick due to its focus on technology and life sciences. Hercules provides financing to AI and cybersecurity start-ups. The company’s strong portfolio performance and dividends make it an attractive investment. Hercules has outperformed the S&P 500 over the past two decades.

Despite competitive dynamics, Hercules offers stability and passive income. The company’s track record and focus on AI-related businesses make it a compelling long-term investment. The Motley Fool Stock Advisor team has identified other top stocks for investors to consider. Their recommendations have historically produced significant returns.

Read more at Yahoo Finance: The Best Ultra-High-Yield Dividend Stock to Invest $50,000 in Right Now