Orchid Island Capital, Inc.
- Open
- 6.88
- Day high
- 6.88
- Day low
- 6.69
- Prev close
- 6.85
- Volume
- 5.0M
- Mkt cap
- $861M
- P/E (TTM)
- 8.9
- EPS (TTM)
- $0.75
- P/B
- 0.6
- P/S
- 2.5
- Yield
- 20.57%
- Per share
- $1.38
Orchid Island Capital, Inc. (ORC) is a Real Estate company listed on NYSE. The stock is down 4% over the past year.
Orchid Island Capital, Inc. (ORC) financials & analyst ratings
Fundamentals (TTM)
Source: exchange market data + company filings. Figures are trailing-twelve-month or as most recently reported. For informational purposes only — not investment advice.
ORC earnings date, history & EPS estimates
| Report date | EPS est | EPS actual | Surprise | Revenue | Rev. surprise |
|---|---|---|---|---|---|
| Apr 24, 2026 | $0.27 | $0.26 | -3.7% | $57M | +85.5% |
| Jan 29, 2026 | $0.23 | $0.19 | -15.6% | $132M | +201.0% |
| Oct 23, 2025 | $0.18 | $0.16 | -11.1% | $78M | +110.0% |
| Jul 24, 2025 | $0.15 | $0.16 | +6.7% | $84M | +262.4% |
| Apr 24, 2025 | $0.18 | $0.16 | -11.1% | $21M | +78.6% |
| Jan 30, 2025 | $-0.03 | $0.05 | +266.7% | $-145M | -3516.4% |
| Oct 24, 2024 | $-0.06 | $-0.05 | +16.7% | $68M | +292.5% |
| Jul 25, 2024 | $-0.09 | $-0.09 | +0.0% | $53M | -9.8% |
| Apr 25, 2024 | $-0.09 | $-0.12 | -33.3% | $24M | -39.4% |
| Feb 1, 2024 | $-0.25 | $-0.13 | +48.0% | $84M | +712.4% |
| Oct 26, 2023 | $-0.22 | $-0.28 | -27.3% | $75M | +890.7% |
| Jul 27, 2023 | $-0.01 | $-0.34 | -2450.6% | $15M | +53.0% |
ORC insider trading activity (SEC Form 4)
| Date | Insider | Type | Shares | Price |
|---|---|---|---|---|
| Jul 1, 2026 | Parker Ava Ldirector | Grant | 1,679 | — |
| Jul 1, 2026 | FILIPPS FRANK Pdirector | Grant | 3,586 | — |
| Jul 1, 2026 | Parker Ava Ldirector | Grant | 3,586 | — |
| Jul 1, 2026 | Morabito Pauladirector | Grant | 3,586 | — |
| Jul 1, 2026 | Bitting W Colemandirector | Grant | 3,586 | — |
| Jun 29, 2026 | Haas G Hunter IVdirector, officer: Chief Financial Officer | Option | 3,031 | — |
| Jun 29, 2026 | Haas G Hunter IVdirector, officer: Chief Financial Officer | Tax | 1,193 | $6.86 |
| Jun 29, 2026 | Haas G Hunter IVdirector, officer: Chief Financial Officer | Option | 3,032 | — |
| Jun 29, 2026 | Cauley Robert Edirector, officer: Chief Executive Officer | Option | 3,694 | — |
| Jun 29, 2026 | Cauley Robert Edirector, officer: Chief Executive Officer | Option | 3,694 | — |
| Jun 1, 2026 | Parker Ava Ldirector | Grant | 1,660 | — |
| May 5, 2026 | Parker Ava Ldirector | Grant | 1,877 | — |
| Mar 27, 2026 | Haas G Hunter IVdirector, officer: Chief Financial Officer | Tax | 1,133 | $7.15 |
| Mar 27, 2026 | Cauley Robert Edirector, officer: Chief Executive Officer | Option | 3,694 | — |
| Mar 27, 2026 | Cauley Robert Edirector, officer: Chief Executive Officer | Option | 3,694 | — |
Source: ORC SEC Form 4 filings, latest Jul 1, 2026. For informational purposes only — not investment advice.
See the full ORC insider & 13F page →Orchid Island Capital, Inc. company profile
Overview
Orchid Island Capital, Inc. (NYSE: ORC) is a specialty finance company that operates as a real estate investment trust (REIT) focused on investing in residential mortgage-backed securities. Founded in 2010 and publicly traded since 2013, the company is headquartered in Vero Beach, Florida. Orchid Island specializes in Agency RMBS - mortgage-backed securities that are backed by single-family residential mortgage loans and guaranteed by government-sponsored enterprises like Fannie Mae and Freddie Mac. The company employs a leveraged investment strategy, using borrowed funds to amplify returns on its mortgage security investments while managing interest rate risk through various hedging instruments.
Business
Orchid Island Capital operates in the mortgage REIT sector, which is a specialized segment of the real estate investment trust industry. Unlike traditional REITs that own physical properties, mortgage REITs invest in mortgage-related securities and loans. The company's core business revolves around purchasing and holding Agency Residential Mortgage-Backed Securities (RMBS), which are investment vehicles created when banks bundle together residential mortgages and sell them to investors. Agency RMBS are particularly attractive because they carry an implicit government guarantee through government-sponsored enterprises (GSEs) like Fannie Mae, Freddie Mac, and Ginnie Mae. This backing significantly reduces credit risk, as investors are protected against borrower defaults. The company's portfolio includes several types of Agency RMBS: 1. Traditional pass-through securities - These are the most basic form where mortgage payments from homeowners flow directly through to investors. When homeowners make their monthly mortgage payments, a proportional amount is distributed to RMBS holders. 2. Collateralized Mortgage Obligations (CMOs) - These are more complex securities that redirect cash flows from underlying mortgages into different tranches with varying risk and return profiles. 3. Structured Agency RMBS - Including interest-only (IO) securities that receive only the interest portion of mortgage payments, inverse interest-only securities, and principal-only (PO) securities that receive only the principal repayments. The company focuses primarily on securities backed by 30-year fixed-rate mortgages with various coupon rates, typically ranging from 3% to 7%. As of recent quarters, Orchid Island manages a portfolio worth approximately $5-6 billion in mortgage-backed securities.
Revenue model
Orchid Island Capital generates revenue through a net interest margin model - the company borrows money at short-term rates and invests in longer-term mortgage securities that typically yield higher returns. The primary revenue source is the spread between what the company earns on its mortgage securities and what it pays to borrow funds. The company's funding comes primarily through repurchase agreements (repos), where Orchid Island sells its mortgage securities to financial institutions with an agreement to buy them back at a slightly higher price. This is essentially short-term secured borrowing, with the mortgage securities serving as collateral. The company maintains relationships with 27 different repo counterparties to ensure diverse funding sources. Key factors that influence profitability include: Positive factors: Steeper yield curves benefit the company as they can borrow at lower short-term rates while earning higher yields on longer-term securities. Tightening mortgage spreads increase the value of existing holdings. Lower prepayment speeds allow the company to hold securities longer and earn more interest income. Market volatility can create buying opportunities when other investors sell securities at discounted prices. Negative factors: Rising short-term interest rates increase funding costs faster than asset yields adjust. Flattening or inverted yield curves compress net interest margins. Faster prepayment speeds force reinvestment of principal at potentially lower yields when mortgage rates decline. Widening mortgage spreads reduce the value of existing holdings and can create mark-to-market losses. The company uses interest rate swaps and other derivatives to hedge against interest rate risk, typically hedging 80-90% of its funding liabilities. This hedging strategy helps stabilize net interest income but comes with its own costs and risks. Orchid Island's leverage ratio typically ranges from 6-8 times equity, meaning that small changes in asset values or interest rate spreads can significantly impact returns and book value.
Competitive moat
Orchid Island Capital operates in a highly competitive market with limited sustainable competitive advantages. The company's primary moat is relatively weak and consists mainly of operational expertise and market relationships rather than structural barriers to entry. The company's main competitive advantages include specialized knowledge in mortgage-backed securities analysis, valuation, and risk management. Management's experience in navigating complex interest rate environments and understanding prepayment behaviors provides some edge in security selection and portfolio construction. Additionally, Orchid Island has established funding relationships with 27 repo counterparties, which provides diversified and relatively stable access to financing - a critical component for leveraged mortgage REITs. However, these advantages are not particularly durable. The mortgage REIT space has low barriers to entry, and many well-capitalized competitors including larger mortgage REITs, hedge funds, and bank proprietary trading desks compete for the same Agency RMBS investments. The company faces significant competition from entities with potentially lower funding costs, such as banks with access to deposits, or larger institutions with better credit ratings that can borrow more cheaply. Key competitive threats include Federal Reserve policy changes that could alter the supply-demand dynamics in the mortgage market, potential GSE reform that could affect Agency RMBS structures, and technological advancement in mortgage origination and securitization that could disrupt traditional market dynamics. The company is also vulnerable to macroeconomic cycles - during periods of financial stress, funding can become scarce or expensive, forcing asset sales at unfavorable prices. The business model is inherently cyclical and capital-intensive, with returns heavily dependent on interest rate environments and market conditions largely outside management's control. While management skill matters, it cannot fully overcome adverse market conditions, making this a relatively weak moat business.
Risks & safety
Orchid Island Capital presents moderate financial risk with adequate liquidity but inherent leverage-related vulnerabilities typical of mortgage REITs. Liquidity and Solvency: • Strong cash position: $396 million in cash and short-term investments (Q1 2025) • Current ratio of 20.0, indicating excellent short-term liquidity • No traditional debt - funding primarily through repo agreements • 53% of equity held in liquid assets provides substantial cushion Leverage and Risk Metrics: • Economic leverage ratio: 7.8x (Q1 2025), within typical range for mortgage REITs • Debt-to-equity ratio: 0.0 (repos not classified as traditional debt) • Book value volatility: Recent quarters show book value ranging from $7.94-$9.12 • Interest rate hedging covers approximately 84% of funding liabilities Valuation Metrics: • Price-to-book ratio: 0.84 (trading below book value) • Price-to-earnings ratio: 10.5 (Q1 2025) • Dividend yield: Approximately 20% based on $1.44 annual dividend • Return on equity: 2.0% (Q1 2025), though volatile quarter-to-quarter Other Considerations: • Repo funding creates refinancing risk if counterparties withdraw • Mark-to-market accounting causes book value volatility • Interest rate sensitivity despite hedging strategies • Prepayment risk can force reinvestment at unfavorable rates
Recent development
Over the past few years, Orchid Island Capital has implemented several strategic shifts to navigate challenging interest rate environments and market volatility. The company has adopted a "barbell strategy" in portfolio construction, maintaining positions in both lower coupon securities (3-4%) for potential rate decline scenarios and higher coupon securities (6-7%) to benefit from the current higher rate environment. A significant development has been the company's up-in-coupon bias, systematically increasing the weighted average coupon of its portfolio from 3.47% in 2022 to 4.94% by Q3 2024. This shift reflects management's view that interest rates are more likely to remain elevated or increase further rather than decline significantly. The company has been actively purchasing Fannie Mae 5.5% and 6% coupon securities, particularly focusing on Florida and low-balance pools that offer attractive risk-adjusted returns. Capital management has become increasingly active, with the company raising over $300 million through at-the-market (ATM) equity offerings in 2024. These proceeds were deployed into higher-yielding securities to improve the portfolio's earning potential. Management also reactivated the share buyback program when the stock trades significantly below book value, demonstrating a more dynamic approach to capital allocation. The company has refined its hedging strategy, extending hedge durations to 7-10 years and increasing hedge ratios to cover 80-90% of funding liabilities. This represents a more conservative approach to interest rate risk management compared to earlier periods. Additionally, Orchid Island has diversified its funding sources, expanding from fewer counterparties to 27 repo relationships and executing its first indemnified repo agreement, which provides additional funding flexibility. Risk management improvements include maintaining higher liquidity levels (53% of equity in liquid assets) and implementing more sophisticated duration matching between assets and hedges. The company has also become more selective in security purchases, focusing on pools with favorable prepayment characteristics and avoiding securities with high negative convexity.
ORC company profile · for informational purposes only — not investment advice.
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