Eagle Eye Opener

Best of Both Worlds Offers 17.58 Yield

Best of Both Worlds Offers 17.58 Yield (DividendChannel)

You’ve read in this space before about the tremendous year that real estate investment trusts (REITs) are having — in terms of the high double-digit percentage dividend yields they’re paying investors. Well, Orchid Island Capital Inc. (ORC) does regular REITs one better. It combines the income-generating power of a REIT with the gathering momentum of financial sector companies to pay out a remarkable 17.58 percent monthly yield. That’s because ORC is a specialty finance company, clothed as a REIT. The company focuses on two types of Agency residential mortgage-backed securities (RMBS): pass-through Agency RMBS and structured Agency RMBS, such as collateralized mortgage obligations (CMOs), among other things. Payments for pass-throughs consist of both interest and principal on the securities and are generally made monthly, which adds up to a yield of 17.58 percent for ORC investors. Not bad.

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