EICA: Eagle Point Income's Remaining Term Preferred
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Retired InvestorInvesting GroupFollow5ShareSavePlay(7min)CommentsFollow us on Google for the latest stock newsFollow Seeking Alpha on Google for the latest stock newsSummaryEagle Point Income Company Inc. targets high current income by investing primarily in junior debt tranches of CLOs backed by below-investment-grade U.S. senior secured loans.Recent redemptions of EIC’s Series B and C term preferred stocks signal corporate financial strength and prudent capital management.EICA, the remaining 5.0% Series A Term Preferred due 2026, offers a 5.37% yield and benefits from robust asset coverage, estimated at 5.3x.Callable preferreds present strategic opportunities, but investors should weigh reinvestment risk if issues are redeemed amid falling interest rates.While a secure 5% yield and YTM, I think most investors would be willing to accept some price risk and gain 2-3% greater yield, thus a Sell rating is assigned.Looking for a portfolio of ideas like this one? Members of iREIT®+HOYA Capital get exclusive access to our subscriber-only portfolios. Learn More » Andrii Dodonov/iStock via Getty Images Introduction Eagle Point Income Company Inc. (EIC) invests in Collateralized Loan Obligations, known as CLOs, which comes with this definition: CLOs are securities backed by a pool of debt, typically corporate loans with low credit This article was written byRetired Investor9.29K FollowersFollowRetired Investor has been investing since the 1980s and has a background in data analysis and pension fund management. He writes articles to help others prepare for retirement by investing in CEFs, ETFs, BDCs, and REITs. He is a long only investor and shares strategies for trading options with a focus on cash-secured-puts. He is a contributing author to the investing group iREIT®+HOYA CapitalThe group helps investors achieve dependable monthly income, portfolio diversification, and inflation hedging. It provides investment research on REITs, ETFs, closed-end funds, preferreds, and dividend champions across asset classes. It offers income-focused portfolios targeting dividend yields up to 10%.Learn more.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.