With interest rates rising again, companies with a variable asset base are preferred investments for income investors. Higher interest rates translate into higher interest income related to floating-rate debt investments. Since the Federal Reserve is expected to lift interest rates at least two times more in 2017 (the central bank hiked twice, in December last year and in March), companies with positive asset sensitivity are poised to do well this year. This company is a good choice for income investors. The commercial mortgage lender has robust dividend coverage. An investment in it yields 8.43 percent.
Ladder Capital Corp.'s (NYSE:LADR) high dividend income and earnings upside, tied to an increase in short-term interest rates, are the two biggest reasons to consider the commercial mortgage lender for a dividend portfolio. Ladder Capital's floating-rate investments are poised to deliver higher interest income in an environment of higher short-term interest rates, which in turn tilts the odds in favor of a dividend hike. Ladder Capital has good dividend coverage, and an investment in the lender pays shareholders an eight percent dividend.
Source: Seeking Alpha
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