High Yield Stock Pays 10%, Strong Dividend Coverage Stats, Dividend Upside

High yield income vehicles often pay shareholders a high dividend which may, or may not, be sustainable. That said, though, some high yield income vehicles actually come with dividend upside, and this company surely is one such company that investor may want to place at the top of their shopping lists. The reason for this is that the company's dividend coverage measures tilt the odds in favor of a dividend hike in 2017, and this is especially true if the Federal Reserve keeps on pushing short term interest rates higher.

Apollo Commercial Real Estate Finance (NYSE:ARI) is a high yield income vehicle that is still worth buying. Though shares have hit a new 52 week high lately, the commercial real estate finance company convinces with strong dividend coverage stats. Further, the company may soon hike its dividend as operating earnings get a lift from higher interest rates tied to the company's floating rate loan portfolio. Apollo Commercial Real Estate Finance, in a nutshell, is a commercial real estate debt provider that invests in performing first mortgage loans, subordinate loans, commercial mortgage backed securities, and other instruments. First mortgage loans and subordinate loans make up the bulk of the real estate company's investment portfolio. Way more than 80 percent of loans are floating rate, potentially leading to a significant operating earnings boost in an environment of rising interest rates.

Source: Seeking Alpha

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