EIC Stock Pays a High Dividend
Fact: not all dividend stocks are created equal. While many promise steady income over time, very few can deliver higher yields and come at a relatively lower risk. So, finding a good, high-yielding dividend stock is akin to finding a needle in a haystack.
As an income investor, you want to find a stock that pays well, makes regular payouts, and doesn’t keep you up at night with wild price swings. If your income investment is causing insomnia, is it really worth it?
With all this said, there’s one income opportunity that income investors should get familiar with: Eagle Point Income Company Inc (NYSE: EIC). EIC stock offers robust monthly income.
Eagle Point Income Company is a closed-end fund (CEF) with the primary focus of providing a high level of income to shareholders. The fund invests in junior debt tranches of collateralized loan obligations (CLOs). At times, the company might also invest up to 35% of its assets in CLO equity securities and related securities and instruments. (Source: “About EIC,” Eagle Point Income Company Inc, last accessed February 28, 2025.)
Before going into further detail, let’s go over some term explanations first.
A “closed-end fund” refers to a company that raises money from investors, which it uses to invest to generate returns.
A CLO is a collection of loans bundled together, and investors, like those holding EIC stock, buy different portions of it. Some portions are more secure and offer lower returns, while others are riskier but provide higher yields. Eagle Point Income Company focuses on the safer, high-quality portions of the CLOs.
Financial Performance Intact; Good News for EIC Stockholders
To say the least, Eagle Point is firing on all cylinders—and interestingly enough, it’s happening in a higher-interest-rate environment. Generally, junior debt doesn’t do too well in a higher rate environment. This shows that Eagle Point Income Company’s management is well-versed in what they are doing and has the ability to steer the company in the right direction, even when there are headwinds.
On February 20, Eagle Point reported its financial results for the 2024 fourth-quarter and full-year periods.
Regarding the fund’s financial performance, Thomas P. Majewski, its chairman and chief executive officer, said, “Our fourth quarter performance capped off another excellent year for the Company. We continue to generate strong cash flows and generated a return on equity of 21.0% for 2024.”
“For the second consecutive quarter, we generated $0.08 per share in realized gains, harvesting gains from securities we purchased at a discount.” (Source: “Eagle Point Income Company Inc. Announces Fourth Quarter and Full Year 2024 Financial Results,” Eagle Point Income Company Inc, February 20, 2025.)
If the management of the company continues to invest in a prudent way, it will continue to make EIC stock a compelling opportunity for long-term investors.
EIC Stock Pays Solid Monthly Dividend
One of the most attractive things about EIC stock is its dividend payments. While EIC can fluctuate, getting paid regularly can make a big difference in an income-focused portfolio.
EIC stock currently pays around $0.20 per share every month. In its recent financial performance filings, Eagle Point Income Company indicated that it will pay this amount until at least June 2025. At the current pace, and assuming it remains the same for a year, EIC stock has an inflation-crushing forward dividend yield of 15.23%.
Now, it’s also important to understand that, over the years, the monthly payment amount has increased a lot. Consider this: in 2021, EIC stock’s investors got paid around $0.08 per share monthly; now it’s $0.20 per month. So, monthly payments have increased 150% in just the past few years!
The Lowdown on EIC Stock
EIC stock isn’t the most exciting stock on the market. In fact, one might even call it boring. However, for investors seeking consistent, high income, EIC stock presents a great opportunity.
The prudent management at Eagle Point Income Company has shown that it can invest and generate solid returns even when there are headwinds.
The institutional ownership in EIC stock isn’t that high, at just 3.06% of all outstanding shares. The top three institutions own around four million shares of EIC stock, generating income of just over $800,000 a month.
One last important point to note: 18.25% of the company’s outstanding shares are owned by insiders. This suggests that Eagle Point’s insiders have some incentive to generate solid returns.