Eagle Point Income Co 8.00% Series C Term Preferred Stock due 2029

EICC

Market cap $42.5M

Eagle Point Income Co Inc and its preferred stock EICC offer high yields and stable income, standing out in today's fixed income market. EICC provides an 8% annual cumulative distribution and 8.20% yield to maturity. EICC is rated a buy for its limited credit risk, high yield, and strong relative value versus peers, making it a compelling income investment.

With the month of July closing out, we are once again seeing the broader equity markets pushing to new all-time highs. As we enter into new all-time highs, we appear to be looking quite stretched on valuations, and CEF discounts have been narrowing.

Eagle Point Income Co Inc (EIC) Q2 2025 Earnings Call Transcript

CLOs have been punished in 2025 with ETFs and closed end funds showing significant deterioration. EIC has outperformed ECC but has recently cut the distribution and trails passive ETFs over the last year. We explore EIC's recent performance, valuation, and outlook.

Monthly-paying income investments can be attractive for retirees, but also for those still accumulating wealth, when reinvested for compounding income over time. Fixed-income focused closed-end funds can provide those attractive monthly distribution yields that income-focused investors are looking for. Today, we are looking at two funds that provide a monthly payout plus are trading at attractive discounts.

EIC's NAV has been consistently declining due to shrinking net investment income and reduced NAV premium, driven by lower credit spreads and base rates. The recent dividend cut to $0.13/share offers only marginal coverage, leaving the payout vulnerable to further headwinds. Eagle Point Income's floating-rate portfolio is highly sensitive to Fed policy, so likely rate cuts threaten both income stability and future distributions.

Eagle Point Income Co. recently reduced its monthly dividend by 35%, causing price volatility and investor anxiety about income safety. Despite the dividend cut, I believe the move reflects responsible management, prioritizing NAV preservation over unsustainable payouts. The fund's focus on CLO debt tranches and a leverage ratio of 30.66% support the safety of its 8.0% Series C Term Preferred Stock.

We closed out the first half of 2025, making it an appropriate time to give the overall CEF space a fresh look for potential opportunities. As the broader equity indexes have been performing quite well, discounts in the CEF space have narrowed overall. The best relative value more broadly is in the municipal bond space and the "hybrid" funds.

We review the CEF market valuation and performance through the first week of July and highlight recent market action. CEF sectors rallied this week, with tightening discounts pushing valuations into an expensive zone. Debate continues on CEF distribution sustainability, especially for equity funds like UTG.

The thesis of this article is that you can generate much higher returns by investing in unrated preferred stocks and baby bonds. This is where the bargains are. This is also an educational article on how one might rate or value an unrated security in order to see if it is undervalued versus similar or similarly rated securities. We do this case study by using unrated Eagle Point Income's term preferred stock ticker EICC.