Orchid Island Capital Inc. (ORC)

[morokoy]

Q. When is a dividend worth more than its value?
A. When the stock is trading at a premium to its NAV (Net Asset Value), and you take your payment via a DRIP (Dividend Re Investment Plan.

e.g. You own 1000 shares of a $10.00 BDC and it pays a .10 dividend. So you are due a dividend of $1000.00 However, BDC's NAV is $8.00 which is what is used when the dividend is paid, so basically you receive 125 shares, which you can now sell for $10, and collect $1,250.00.

Indeed there are so many nuances to trading.

For example, PSEC gives a 5% discount - We have adopted a dividend reinvestment plan (also known as a “DRIP”) that provides for reinvestment of our distributions on behalf of our stockholders, unless a stockholder elects to receive cash. Effective May 21, 2020, we made a change to our long-standing DRIP started in 2004: stockholders may now receive a number of newly-issued shares based on 95% of the market price of our common stock (providing a 5% pricing discount), a benefit to shareholders enrolled in our DRIP (provided their brokers participate), as described in further detail in the 8-K filed April 17, 2020.
https://www.prospectstreet.com/investors/dividend-reinvestment-plan/default.aspx