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This Stock Increased its Dividend 75% with a 13.2% Dividend Yield

Ellington Financial LLC (EFC) is a finance company that engages in acquiring and managing mortgage-related assets, including residential mortgage backed securities, prime jumbo, Alternative A-paper and subprime residential mortgage loans. The Company’s targeted assets also include mortgage-related derivatives, corporate debt and equity securities and derivatives.

On May 7, 2012, the Company’s Board of Directors declared a first quarter 2012 dividend of $0.70 per share (75% increase), payable on June 15, 2012 to shareholders of record on June 1, 2012. The Company’s management also announced that, subject to the ultimate discretion of the Board of Directors, it expected to continue to recommend dividends of $0.70 per common share until conditions warrant otherwise. In addition, at the end of any year the Board of Directors will take into account the Company’s earnings and other factors and will consider whether to declare a special dividend.

During the quarter ended March 31, 2012, the Company paid a dividend for the fourth quarter of 2011 in the amount of $0.40 per share. Dividends paid related to 2011 totaled $1.60per share.

EFC will have a dividend yield of 13.2% based on the $0.70 quarterly dividend.  EFC has an equity summary score of 8.1 out of 10 for a Bullish outlook.  EFC has recently been upgraded by Zacks Investment, Thomson Reuters/Verus, Columbine Capital and Ativo Research.

For the first quarter of 2012, the Company recognized net income of $32.1 million, or $1.90 per diluted share. This compares to net income of $1.7 million, or $0.10 per diluted share, for the quarter ended December 31, 2011. The Company’s reported results reflected strong performance from both of its strategies—non-Agency MBS, including CMBS, as well as Agency RMBS.

On August 4, 2011, the Company’s Board of Directors approved the adoption of a $10 million share repurchase program. The program, which is open-ended in duration, allows the Company to make repurchases from time to time on the open market or in negotiated transactions. Repurchases are at the Company’s discretion, subject to applicable law, share availability, price and the Company’s financial performance, among other considerations. To date, the Company has repurchased 60,980 shares under this program at an aggregate cost of $1.1 million, or an average cost per share of $17.22. No additional shares were purchased during the quarter ended March 31, 2012.

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