This company is a preferred income vehicle to hold as interest rates go up. Its operating earnings are positively correlated to changes in USD LIBOR. Higher interest rates could be a catalyst for a dividend raise AND a higher valuation. An investment in the stock yields 10.1 percent.
With interest rates rising and the commercial real estate market remaining stable, there is a good chance that Apollo Commercial Real Estate Finance, Inc. (ARI) will be able to maintain and potentially even grow its dividend for the benefit of shareholders. The real estate debt provider also has the potential to expand its valuation in a higher rate environment and reduce the gap between share price and book value.
Source: Seeking Alpha
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