Orchid Island Capital (ORC) just posted its FY 2025 third quarter numbers, reporting total revenue of US$77.5 million and basic EPS of US$0.53. This sits alongside trailing twelve month revenue of US$80.2 million and EPS of US$0.57, which were delivered through a choppy set of quarterly results. The company has seen revenue move from US$21.6 million with EPS of US$0.24 in Q3 2024 to US$77.5 million and EPS of US$0.53 in Q3 2025, with interim quarters including both gains and losses that outline a volatile earnings path for investors to consider. With trailing net profit margins at 76.3%, the latest release keeps attention on how sustainably Orchid Island Capital can translate that profitability into reliable cash returns.

See our full analysis for Orchid Island Capital.

With the numbers now available, the next step is to see how this earnings profile compares with the widely followed narratives around Orchid Island Capital and where the data may challenge those stories.

3.2% earnings growth trails 5 year pace

• Over the last 12 months, earnings grew by 3.2%, compared with a five year average earnings growth rate of 28.2% per year, so the recent pace has been much slower than the longer term record.
• What stands out for bullish investors is that this slower 3.2% earnings growth still sits alongside trailing twelve month net income of US$61.2 million and basic EPS of US$0.57. This keeps profit positive but does not match the stronger growth profile that optimists often point to for the past five years.
  • Supporters who focus on the longer term 28.2% annual growth need to weigh that against the more modest trailing figure based on the recent reporting period.
  • The shift from that higher multi year rate to 3.2% may cause some to reassess how much of the historical growth story still applies to the current earnings pace.

Premium 23.4x P/E alongside 76.3% margin

• ORC trades on a trailing P/E of 23.4x, which is above both the 19.9x peer average and the 13x US Mortgage REITs industry average. Trailing net profit margin sits at 76.3%, slightly lower than the prior year margin of 78.3%.
• Critics highlight that paying 23.4x trailing earnings for a business with 76.3% margins and only 3.2% earnings growth over the last year makes the shares look relatively expensive compared with peers on these specific figures.
  • The gap between the 23.4x P/E and the 13x industry average is large, so bears may argue the market is already attaching a premium that is not fully explained by the current growth rate.
  • With margin slipping from 78.3% to 76.3%, even if profitability is still high, the small decline gives sceptics another data point when they question whether the premium multiple is justified.

18.46% dividend and recent losses flag risk

• The trailing dividend yield of 18.46% is not well covered by earnings or free cash flow, and operating cash flow does not adequately cover debt, while shareholders were substantially diluted over the past year.
• Bears argue that the mix of a very high 18.46% yield, weak coverage of both the dividend and debt, and a loss in Q2 2025, when total revenue was US$28.6 million and net income was a loss of US$33.6 million, heavily supports a cautious stance on the sustainability of recent payouts.
  • The swing between a loss in Q2 2025 and profits in other quarters, alongside substantial dilution, means income focused holders are relying on a capital structure that has already been stretched in the past year.
  • Because the dividend is not clearly backed by earnings or operating cash flow in the trailing data, income investors need to pay close attention to how future quarters balance cash generation against obligations.

Stay with the numbers a little longer and see how different investors frame ORC’s high yield and premium multiple in their full narratives. 📊 Read the full Orchid Island Capital Consensus Narrative.

Next Steps

Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on Orchid Island Capital's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move.

See What Else Is Out There

ORC combines slower recent earnings growth, a premium P/E, an uncovered 18.46% dividend and stretched cash coverage, which raises questions around income reliability.

If you want yield with fewer red flags around coverage and balance sheet strain, use our these 1803 dividend stocks with yields > 3% today to focus on payouts that look more sustainable.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.