 Editors note: This column is part of InvestorPlace.coms Best Stocks for 2020 contest. Neil Georges pick for the contest is Hercules Capital NYSE:HTGC.The second quarter of 2020 had one of the best returns for the U.S. stock market since 1998. The SP; 500 returned 20.5, making for a huge rebound from the ghastly first quarters plunge. And while the SP; 500 is still in the red by 3.1, its way, way better than that huge plunge resulting in a loss of 33.8.But what really performed in the second quarter was the technology sector stocks. The SP; Information Technology Index returned 30.5 for the second quarter. That makes for a near-50 better return than for the general market.InvestorPlace - Stock Market News, Stock Advice Trading TipsBut one of my favorite stocks inside the model portfolios of my Profitable Investing did better than both the general market and the tech market. It also happens to be my pick for InvestorPlace.coms Best Stocks contest. Hercules Capital NYSE:HTGC stock returned 41.5. And it did so by being at the heart of U.S. technology in Palo Alto, California. In fact, its one of the prime companies working to develop technologies -- and it cashes in well along the way.Source: Bloomberg Hercules Capital HTGC Total ReturnHercules Capital did all this with big price gains and its ample series of regular and ongoing special dividends. HTGC stock has an annual yield of 13.7. And this isnt just a flash in the pan for shareholders in this company. Over the trailing 10 years, the stock has returned 186.1 for an annual equivalent return of 11.1. That provides evidence of a whole lot of dependability. Hercules Benefits From a Big Lift for TechHercules Capital is an alt-financial company providing finance with equity participation to tech companies in various stages of development. Tech is one of the better forward-looking segments -- even through the novel coronavirus. Thats because the sector is providing solutions for more remote commerce, management, as well as life science products and services. Many of Hercules highly diversified portfolio companies should continue to advance.It is structured as an investment holding company, also known as a business development company BDC under the Investment Company Act of 1940. BDCs were further codified under the Small Business Investment Incentives Act of 1980. Both of these bits of U.S. law allow the company to largely avoid federal corporate income taxes. In other words, this helps Hercules Capital generate more cash and fulfill bigger dividend distributions. 7 Utilities Stocks to Buy With Reassuring Dividends Hercules is a VC-style firm that focuses entirely on technology and tech-related companies in various stages of development. It provides loans to fund company development as well as asset-based finance. It works with its companies to bring them to IPOs or acquisition by larger firms. And since its founding back in 2003, it has successfully worked with nearly 500 companies, bringing billions of dollars of value to the markets.Unlike many other BDCs, it does not participate in collateralized loan obligations CLOs nor does it involve mortgage loans or mortgage-backed securities MBS. This limits its risk and aids in its transparency for shareholders. All About Hercules Capitals PortfolioHTGC breaks down its portfolio of companies into four primary groups. The first is life sciences, which includes many drug and therapeutic companies. Then theres general technology which includes numerous class-leading companies in various businesses and markets. The last two groups are sustainable and renewable energy companies and special opportunities.Life sciences companies make up about half of its current portfolio. The full list of the current portfolio list can be found here. Other than its life sciences companies, the rest of its portfolio spans tech companies in 16 industry groups.Hercules has plenty of bold-faced names that it successfully worked with over the years. And currently, it works with companies including FanDuel in the increasingly popular sports gaming market. It has BrightSource Energy in renewables. Oh, and HTGC also has American Superconductor NASDAQ:AMSC, which is leading in greater power efficiencies.Another great thing about Hercules is that its benefiting from current tech trends. In its portfolio it has DocuSign NASDAQ:DOCU for online contracts and agreements as well as Evernote for cloud document management. And it has innovative food brands including Annies and Impossible Foods. Lastly, for those seeking more personal and family information, it also has 23andMe as well as Ancestry.com. How Does HTGC Work?So how exactly does it work? To start, know that the financing isnt just about making a loan to these companies. Hercules also get equity stakes as part of each transaction, and these stakes provide the company with gains as its portfolio businesses progress.And it just doesnt sit around waiting for the phone to ring. Instead, Hercules relies on its key location. It is based in the U.S. tech center of Palo Alto, California, so it knows everybody in technology. And it also has strategic offices around the country which help it connect to other customers and financial partners. For example, it has a very special team in Washington, D.C. The U.S. government provides plenty of opportunities for tech companies -- and Hercules works to make things possible for its clients.Hercules doesnt just stop at financing and equity participation -- it also provides guidance as companies develop and mature. In turn, this helps the companies become more profitable for Hercules. Best Stocks: Pick HTGC for Dividends and ValueHTGC stock is a great pick because of its dividends. It distributes dividends in regular amounts, currently offering up 32 cents per share. But it also has additional special distributions throughout the year, including the 8 cents it paid on March 9. That brings the annual dividend to a whopping 13.7.But what really makes for a compelling buy is that the stock is so cheap -- even with the big return over the past quarter. Even with all of the embedded technology equity participation and all of the income-generating assets, the stock is valued barely above its intrinsic value. The price-book is only 1.04 times. That compares to the average price-book of the SP; Information Technology Index members of 8.86 times making Hercules a genuine bargain right now. And with the SP; Information Technologys average dividend yield at only 1.2, Hercules 13.7 is even more of a value proposition.I have Hercules Capital as a buy ideally in a taxable account under 12.25.Neil George was once an all-star bond trader, but now he works morning and night to steer readers away from traps -- and into safe, top-performing income investments. Neils new income program is a cash-generating machine ... one that can help you collect 208 every day the markets open. More From InvestorPlace Why Everyone Is Investing in 5G All WRONG Americas 1 Stock Picker Reveals His Next 1,000 Winner Revolutionary Tech Behind 5G Rollout Is Being Pioneered By This 1 Company Radical New Battery Could Dismantle Oil Markets The post Best Stocks for 2020: Hercules Capital Stock Returned 41.5 in Q2 and Is Still Cheap appeared first on InvestorPlace. 