If you’re looking to earn passive income through investing, ARMOUR Residential REIT (NYSE: ARR) might be a stock worth considering. This real estate investment trust specializes in residential mortgage-backed securities in the United States, primarily focusing on securities issued or guaranteed by government-sponsored entities and the Government National Mortgage Association. With a diverse portfolio of fixed-rate, hybrid adjustable-rate, and adjustable-rate home loans, as well as other financial instruments, ARMOUR Residential REIT offers investors the opportunity to earn attractive dividends.
One of the key factors that make ARMOUR Residential REIT an appealing investment is its high dividend yield. At 15.5%, the company’s dividend yield is significantly higher than the average yield of many other stocks in the market. This means that investors can potentially earn a substantial income from their investment in ARMOUR Residential REIT.
In the last 12 months, ARMOUR Residential REIT has paid out $2.88 per share in dividends. This consistent dividend payment history is a positive sign for investors looking for reliable income streams. Additionally, the company’s recent earnings report for Q3 2024 showed a GAAP EPS of $1.21 and a distributable EPS of $1.00, indicating strong financial performance.
To put this into perspective, let’s say you want to earn $100 per month, or $1,200 annually, from ARMOUR Residential REIT dividends. Based on the current dividend yield of 15.5%, you would need an investment value of approximately $7,742. This translates to owning around 416 shares at the current price of $18.62 per share.
It’s important to understand how dividend yield calculations work when estimating your potential income from an investment. The formula is simple: divide the desired annual income by the dividend yield percentage. In this case, $1,200 divided by 0.155 equals $7,742. This calculation gives you a clear target for achieving your income goals through dividend payments.
Keep in mind that dividend yield can fluctuate based on changes in stock prices and dividend payments. As stock prices rise or fall, the dividend yield will adjust accordingly. For example, if a stock pays a $2 annual dividend and is priced at $50, the dividend yield would be 4%. If the stock price increases to $60, the dividend yield would decrease to 3.33%. Conversely, a decrease in stock price to $40 would result in an increased dividend yield of 5%.
In conclusion, investing in ARMOUR Residential REIT can be a lucrative opportunity to earn passive income through dividends. With a high dividend yield and a track record of consistent payments, this stock has the potential to generate significant returns for investors seeking to build a passive income stream. By understanding how dividend yield calculations work and staying informed about the company’s financial performance, you can make informed decisions about your investment strategy and work towards achieving your income goals.
