Five Oaks Investment Corp. (OAKS)

[bar1080]

January 11, 2018: "15% Dividend Yield Not Worth The Risk"

"Challenges
The mortgage REIT is facing dramatic challenges from the flattening of the yield curve. Covering the current dividend is already problematic. Eventually, we may see a reverse split. Unless the yield curve steepens materially, the company will continue to be in a difficult position. There was nothing fundamentally wrong with its decision to transition to this strategy. I believe it was a very reasonable choice. However, investors today have the benefit of seeing what has happened to the yield curve over the past few years. Consequently, they have the benefit of additional insight when making the choice of where to allocate their capital. As it stands, I am concerned about the sustainable level of core earnings and dividends going forward. I believe a reduction in the dividend would be a significant negative catalyst. Therefore, it is easy for me to maintain a bearish view."

https://seekingalpha.com/article/4136765-15-percent-dividend-yield-worth-risk