Compass Point Initiates Coverage on Orchid Island Capital (ORC) at Neutral

Orchid Island Capital, Inc. (NYSE:ORC) is included among the 13 Highest Paying Monthly Dividend Stocks to Buy.

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On December 15, Compass Point started coverage of Orchid Island Capital, Inc. (NYSE:ORC) with a Neutral rating and a $7.50 price target.

In its Q3 2025 earnings, the company said market conditions were supportive for levered Agency RMBS investors like Orchid. Interest rates stayed fairly stable during the quarter, aside from short-term rates, which moved lower as investors priced in more rate cuts beyond the 25-basis-point cut in September.

Orchid Island Capital, Inc. (NYSE:ORC) generated a total return of 6.7% for the quarter, on an unannualized basis. The company continued to build its capital base, which remains entirely common equity. It put that capital to work in Agency RMBS, offering net interest income and total return potential above historical norms.

Even with prepayments picking up as rates declined, Orchid Island Capital, Inc. (NYSE:ORC) was still able to find attractive investments. Management credited careful security selection and risk management. Leverage stayed largely unchanged at about 7.4x, including TBA positions. The company noted it has room to increase leverage if market returns become more compelling.

Net income for the quarter came in at $72.1 million, up sharply from $17.3 million in the same period last year. Book value rose by $0.12 per share during the quarter. That increase reflected net income of $0.53 per share, offset by dividend payments of $0.36 per share. The company also reported $50.6 million in net realized and unrealized gains on Agency RMBS and related derivatives, including net interest income from interest rate swaps.

Orchid Island Capital, Inc. (NYSE:ORC) is a specialty finance company that invests on a leveraged basis in Agency residential mortgage-backed securities.

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