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Arbor Realty Trust, Inc. (ABR), Fifth Street Finance Corp. (FSC): 3 Small Financial Stocks, One Big Opportunity

Finding the appropriate source of regular income for a retirement portfolio has become a challenging task since the Fed brought the interest rates to record lows. Despite the fact that interest rates have risen since last fall, the 10-year Treasuries are offering 1.87%. Therefore, investors are left with only a few options to enhance their regular income. This article presents to you with one such opportunity. I have selected three small stocks related to the financial sector yielding above 6%. The remainder of the article will touch upon each briefly.

3 Unique Stocks Offering Income AND Growth

Arbor Realty Trust, Inc. (NYSE:ABR)

Arbor Realty Trust, Inc. (NYSE:ABR) has a market cap of around $250 million and is current yielding 6.12% on its quarterly dividend of $0.12 per share. The company has increased its dividend payout three times since May 2012. Arbor Realty Trust, Inc. (NYSE:ABR) is currently trading at 7% premium to its book value.

Arbor Realty Trust, Inc. (NYSE:ABR) operates as a specialized real estate finance company and has elected to be taxed as a REIT. The company’s investment portfolio includes assets in multi-family and commercial real estate markets. It is invested in real estate-related bridge and mezzanine loans. It also has investments in real estate properties from which it generates rental income.

Ellington Financial LLC (NYSE:EFC)

Ellington Financial is currently yielding 12.4% on its dividend payout of $0.77 per share, which increased from the prior quarter’s payout of $0.7 per share. The company has a market cap of $500 million and is trading in line with its recent quarter’s book value.

Ellington Financial LLC (NYSE:EFC) has operated as a mortgage REIT in the United States since 2007. Ellington is invested in residential mortgage backed securities, both Agency and non-Agency. It is also invested in mortgage-related derivatives, commercial mortgage backed securities, asset backed securities and corporate debt and equity securities.

Fifth Street Finance Corp. (NASDAQ:FSC)

Fifth Street Finance Corp. (NASDAQ:FSC) is currently yielding 10.4% on its dividend distribution of $0.10 per share. Fifth Street Finance Corp. (NASDAQ:FSC) has a special place in the hearts of investors looking for regular income because its dividend distributions are monthly. The company has maintained its current monthly dividend payout since the start of the prior year. Fifth Street Finance Corp. (NASDAQ:FSC) is currently trading at an 11% premium to its recent quarter’s book value and has a market cap of roughly $1.17 billion.

Fifth Street Finance Corp. (NASDAQ:FSC) lends and invests in small and medium sized companies. Its debt investments have the objective of enhancing its current income, while equity investments have the effect of capital appreciation, maximizing the total return. As of September 2012, over 90% of the company’s investment portfolio was composed of debt investments; the remainder were equity investments. Overall, it has interests in 65 companies.


The aforementioned three financial stocks have shown dividend sustainability in the past. Therefore, I believe they present an opportunity to expand the current income of your retirement portfolio.

The article 3 Small Financial Stocks, One Big Opportunity originally appeared on and is written by Adnan Khan.

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