ORC
- Orchid Island Capital, Inc.
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Overview
Company Summary
Orchid Island Capital, Inc. (ORC) is a real estate investment trust (REIT) that focuses on investing in residential mortgage-backed securities (RMBS). Essentially, the company operates as a mortgage REIT and primarily invests in a particular type of financial asset � RMBS.
RMBS are securities that represent a collection of residential mortgage loans, which are bundled together and sold to investors in the form of bonds. These bonds provide cash flows to investors through the interest and principal payments made by homeowners on their mortgage loans.
ORC's main objective is to generate income from the interest and principal payments on its RMBS investments. They typically invest in both agency and non-agency RMBS. Agency RMBS are mortgage-backed securities that are guaranteed by government-sponsored enterprises like Fannie Mae, Freddie Mac, and Ginnie Mae. Non-agency RMBS, on the other hand, do not have such guarantees.
By investing in RMBS, ORC earns income from the interest spread between the yield on the mortgages held in its portfolio and the cost of its own borrowing. The company manages its interest rate risk through hedging strategies to protect against potential losses due to changes in interest rates.
Overall, Orchid Island Capital seeks to provide stable and consistent dividends to its shareholders by carefully managing its portfolio of residential mortgage-backed securities. As a publicly-traded company, its shares can be bought and sold on stock exchanges, allowing investors to participate in its potential returns from the mortgage market.