Secure High-Yield Income with Eagle Point's Preferred Stock Ahead of Ex-Dividend Date

In a market marked by volatility, income-focused investors often face a stark trade-off: chase yield at the risk of principal erosion, or settle for safe but meager returns. Eagle Point Credit Company Inc.'s 6.50% Series C Term Preferred Stock (ECCC) flips this script, offering a rare combination of monthly dividend consistency, underlying asset strength, and undervaluation relative to its net asset value (NAV). With its ex-dividend date approaching on June 10, 2025, this security presents a compelling opportunity to lock in a 6.81% yield while positioning for capital appreciation.

Dividend Discipline: A Monthly Income Machine

ECCC's 6.50% annual dividend rate translates to $1.625 per share annually, paid in monthly installments of $0.14. This distribution has remained steadfast since the stock's 2021 launch, even as broader markets stumbled. The most recent ex-dividend date (December 11, 2024) saw no reduction in payout, underscoring Eagle Point's commitment to income reliability.

The consistency is critical. With the June 10, 2025, ex-dividend date looming, investors purchasing shares before this cutoff will receive the $0.14 dividend paid on June 30. At current prices, the annualized yield stands at 6.81%, a premium to the stock's stated coupon due to its trading at a 4.52% discount to its $25 liquidation preference. This discount is a buying signal: the market's undervaluation creates a margin of safety for income seekers.

NAV Support: A Buffer Against Market Whiplash

While dividends are enticing, the true backbone of ECCC's appeal lies in Eagle Point's robust net asset value trends. As of April 30, 2025, the company's NAV estimate was $821.8 million, a 5.7% increase from March's $777 million (revised upward to $868.8 million in April's estimate). This growth stems from Eagle Point's strategic focus on CLO equity tranches, which generate steady income while offering downside protection in credit cycles.

The NAV-to-price ratio further bolsters the case for ECCC. At $23.87 per share (as of May 2025), ECCC trades at a 95.5% of its April NAV estimate—a discount that widens to 94.7% of liquidation value. This creates a dual catalyst: rising NAVs could narrow the discount, while dividends provide steady income. Even if NAV growth stalls, the 6.81% yield alone justifies holding for income-focused portfolios.

Why CLOs Offer Stability in Unstable Markets

Eagle Point's investment thesis hinges on its expertise in collateralized loan obligations (CLOs), where it often stakes significant equity positions to influence terms. CLO equity tranches, while less liquid than bonds, offer seniority in repayment hierarchies and dividend resilience during downturns. This strategy has insulated Eagle Point's income stream: its quarterly net investment income (NII) per common share rose to $6.71–6.81 in April 2025, up from $6.53–6.63 in January.

Critically, ECCC's subordination terms rank senior to common stock and equally with other preferred series, ensuring preferred shareholders are prioritized over equity holders. This structure, combined with mandatory redemption clauses if asset coverage dips below 200%, adds layers of protection.

The Case for Immediate Action

Time is of the essence. To secure the June dividend, investors must own ECCC shares before June 10. Meanwhile, the stock's discount to NAV and liquidation preference creates a sweet spot for entry. Even if near-term market turbulence pressures prices, the 6.81% yield acts as a floor, while NAV growth could narrow the discount over time.

Risks to Consider

No investment is risk-free. A severe credit contraction could strain CLO valuations, though Eagle Point's focus on senior tranches mitigates this. Additionally, the $25 liquidation preference is payable in 2031, so investors must consider duration risk. However, the yield-to-maturity calculation—even at current prices—remains compelling, especially versus alternatives like 10-year Treasuries yielding ~3.7%.

Final Verdict: Buy ECCC Before June 10

Eagle Point's preferred stock (ECCC) is a rare hybrid: a high-yield income generator backed by a growing NAV and a proven dividend track record. With its ex-dividend date days away and trading at a discount to both NAV and liquidation value, now is the moment to act. This isn't just about chasing yield—it's about securing a defensive income stream with asymmetric upside potential as markets stabilize.

Action Items:
1. Purchase ECCC shares before June 10, 2025, to lock in the June dividend.
2. Monitor Eagle Point's June 30, 2025, NAV announcement for further confirmation of asset strength.
3. Hold for the long term to benefit from compounding dividends and potential NAV-driven price appreciation.

In a world of yield scarcity, ECCC is a rare gem—one that rewards patience and decisiveness. Don't miss this chance to secure it before the window closes.