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Investing.com - Lucid (NASDAQ:LCID) Capital Markets initiated coverage on Eagle Point Income Company (NYSE:EIC), a $341 million market cap company that has raised its dividend for three consecutive years, with a Buy rating and a $15.00 price target on Thursday. According to InvestingPro, the company currently offers an attractive 11.6% dividend yield.
The price target suggests EIC should trade at 100% of Lucid’s 2025 year-end NAV estimate of $15.18, representing a potential 23% total return including dividends over the next 12 months.
The research firm highlighted EIC’s differentiated investment strategy and management team experience, noting these factors position the company well to capitalize on CLO debt and equity investment opportunities to achieve high recurring income for shareholders.
Lucid pointed to EIC’s 74% portfolio concentration in BB-rated CLO notes with a 30-year annualized default rate of just 4 basis points as providing "a material layer of protection relative to CLO-equity focused peers," despite EIC’s 11.6% dividend yield being below the peer average.
The stock currently trades at a price-to-NAV ratio of 95%, below both its historical average of 102% and the peer median of 98%, suggesting potential for multiple expansion according to the research firm.
In other recent news, Eagle Point Income Company reported its financial results for the first quarter of 2025, with net investment income and realized gains totaling $0.44 per share, a decrease from $0.54 per share in the previous quarter. The company also announced a reduction in its monthly distribution from $0.20 to $0.13 per share, reflecting adjustments to its earnings potential amidst changing interest rates. Additionally, Eagle Point Income disclosed an unaudited estimate of its net asset value (NAV) per share as of May 31, 2025, ranging between $14.08 and $14.18. The company has been active in raising capital, securing $64 million through an At-the-Market program, which contributed to a NAV accretion of $0.08 per share. A new stock repurchase program has also been authorized, allowing for the buyback of up to $50 million of the company’s common stock by June 2026, subject to market conditions and other factors. CEO Thomas Majewski expressed confidence in leveraging market volatility to the company’s advantage, noting the resilience of their CLO BB securities. Analyst Randy Binner from B. Riley inquired about the dividend reduction, which Majewski attributed to changes in interest rates rather than credit issues.
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