Eagle Point Income Stock: Could 12% Monthly Dividend Pay Off Big?
June 23, 2025
A Monthly Cash-Generating Machine?
In the income investment spotlight today is Eagle Point Income stock.
The 2008 financial crisis has left a scar on investors’ minds, and understandably so. During that time, complex debt structures were causing problems for the financial system, something investors didn’t even want to think about.
But it’s important to know that not all credit and credit-related investments are created equal. And, even now, some are being unfairly overlooked.
Take Eagle Point Income Company Inc (NYSE:EIC) as an example. On the surface, the stock looks like it’s in rough shape. The EIC stock price has pulled back sharply from recent highs, and a quick glance at the chart might make you think there’s trouble.
Chart Courtesy of StockCharts.com
Here’s the thing: in the midst of all this, Eagle Point Income stock is presenting a great opportunity for income investors; it’s a monthly cash-generating machine.
What Does Eagle Point Income Company Do?
Eagle Point Income Company is a closed-end fund (CEF) with the primary focus of providing income investors with a high level of income. 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 June 16, 2025.)
Some terminology to keep in mind here.
A “closed-end fund” refers to a company that raises money from investors, which it uses to invest to generate returns.
A “collateralized loan obligation” 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 CLOs.
Eagle Point Income Stock Offers Monthly Payment
There’s one big thing to know about Eagle Point Income stock: it pays a monthly dividend.
This not very common among dividend stocks. Most high-yield stocks pay quarterly, but EIC delivers income 12 times a year. So, it wouldn’t be wrong to say that it might be appealing to investors seeking constant cash flow.
There’s some certainty with dividend payments as well. An investor knows a few months in advance how much of a dividend will be coming if they hold Eagle Point Income stock.
While presenting its financial results for the first quarter of 2025, Eagle Point announced that EIC stockholders would be getting paid $0.13 for July, August, and September.
If $0.13 ends up being the monthly payment that shareholders investors receive for the rest of the year, then Eagle Point Income stock would have a forward dividend yield of 11.7%.
Previously, EIC stockholders were getting paid $0.20 per share.
Why the dividend cut?
Well, it wasn’t due to deteriorating business or bad investments. Eagle Point is a company that’s reactive to interest rates.
Thomas P. Majewski, the chairman and chief executive officer of Eagle Point, had this to say on the topic: “Earlier today, we declared monthly common distributions of $0.13 per share for the third quarter of 2025. In light of 100 basis points of Fed rate cuts over the past nine months, we believe the new distribution level more closely reflects the Company’s near-term earnings potential in today’s lower interest rate environment. Looking ahead, the Company has liquidity and will continue investing opportunistically during these volatile markets, which should enhance the Company’s net investment income over time.” (Source: “Eagle Point Income Company Inc. Announces First Quarter 2025 Financial Results and Declares Third Quarter 2025 Common and Preferred Distributions,” Eagle Point Income Company, May 28, 2025.)
Another Reasons to Be Bullish on EIC Stock
Beyond the monthly dividend payment, Eagle Point recently just gave EIC stockholders another reason to pay attention. The company announced that its board of directors has authorized a $50.0-million stock buyback program allowing it to buy back shares in the open market.
With this, there are three things to keep in mind…
First of all, this move signals confidence from management. When a company buys back its own stock, it’s usually an indication that management believes the stock price is undervalued.
Secondly, buybacks also create demand in the market and give stability to the stock price. In Eagle Point Income stock’s case, that’s good given the recent decline in the price.
Lastly, share buybacks have a direct benefit for shareholders, as they reduce the number of shares outstanding. This ultimately can mean a boost in earnings and support for the dividend over time. For a high-yield name like Eagle Point Income, buybacks make the bullish case stronger.
The Lowdown on Eagle Point Income Stock
Since mid-February 2025, Eagle Point Income stock has been on the decline. However, it’s important to note that this isn’t a broken business, although it might be a misunderstood one.
For investors who are willing to take a little bit of risk, and who aren’t afraid of terms like “CLO,” robust monthly income and even some capital appreciation could be generated here with EIC stock. I can’t stress this enough: this stock may not be for everyone, but it’s certainly something worth watching. (Of course, none of my comments are meant as a recommendation to buy this stock.)
To recap, Eagle Point Income stock has a dividend yield of 11.7% and pays monthly, plus its board of directors has announced a share buyback program that could help the price and more.
