The dividend was cut 92% and the earnings that pay it are negative. Ready Capital pays $0.01 a quarter, down from $0.125 in 2025, after distributable earnings of −$0.47 a share in Q2 2026 and −$1.47 for the first half — negative even before realized losses (−$0.24 a share in Q2). Book value per share fell to $6.83 at June 30, 2026 from $10.44 at December 31, 2025, a 35% decline in six months. The 13.25% trailing yield is an artifact of the pre-cut $0.125 payment and a share price down 63% over the prior year, not income the portfolio currently earns.
Key risk: Distributable earnings are negative even before realized losses, so the $0.01 dividend is being paid out of a shrinking book, not out of current spread income.
Changes if: Distributable earnings turn positive and cover the $0.01 dividend for two consecutive quarters, or book value stabilizes for two quarters.
- ✕Distributable coverage Q2 2026 distributable earnings −$73.6m (−$0.47/share); before realized losses −$35.1m (−$0.24/share). No coverage of the $0.01 dividend on the REIT AFFO-equivalent base (>90% = fail).
- ✕Book-value trend Book value $10.44 (Dec 31, 2025) → $6.83 (Jun 30, 2026), −34.6% in six months, driven by balance-sheet repositioning/loan sales.
- ✕Raise history Cut $0.125 → $0.01 in Dec 2025 (−92%), held at $0.01 through Jun 2026; prior cuts in 2024–2025 ($0.30 → $0.25 → $0.125). Cut = fail under §4.
- !Leverage Total leverage 3.0x and recourse leverage 1.7x at Jun 30, 2026 (vs 3.5x / 1.6x at Dec 31, 2025). No §4 EBITDAre threshold fits an mREIT; disclosed leverage is information, graded flag because recourse leverage rose while book value fell.
What this grade doesn't say: It screens the dividend only — covered, real, compounding. It says nothing about valuation or price: a well-covered payer can still be overpriced, and its price can still fall.