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.