ARMOUR Residential REIT Offers High Dividend Yield: What Investors Need to Know

High Dividend Yield and Historical Context

Looking at the realm of stocks we track at Dividend Channel, ARMOUR Residential REIT Inc. (Symbol: ARR) has caught attention. In trading on Monday, shares were yielding above 15%, based on a monthly dividend (annualized to $2.88). The stock dipped as low as $18.83 during the day. For investors, dividends are essential since they have historically contributed significantly to the total returns in the stock market.

Consider this example: If you had bought shares of the iShares Russell 3000 ETF (IWV) on May 31, 2000, you would have paid $78.27 per share. By May 31, 2012, each share would be worth $77.79, reflecting a slight loss of $0.48 or a 0.6% decrease over those twelve years. However, during this period, you would have received $10.77 per share in dividends, bringing your total return to 13.15%. Even if you reinvested those dividends, the average annual total return would be about 1.0%. Thus, a sustainable yield above 15% from ARMOUR appears very attractive.

ARMOUR Residential REIT Inc. (Symbol: ARR) is included in the Russell 3000, which marks it as one of the largest companies traded on U.S. stock markets.

Evaluating Dividend Sustainability

Generally, dividends can be unpredictable and often fluctuate based on a company’s profitability. To assess whether ARMOUR Residential REIT Inc. can maintain its recent dividend, examining the dividend history chart for ARR can be beneficial. This analysis may help determine if a 15% annual yield is a reasonable expectation for the future.

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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.