I announced last week that my Special Situations portfolio would continue to buy NorthStar Realty Finance (NYSE:NRF) as long as it hung near $17 per share, assuming no new material developments. Well, the stock remains at that level, so this week I'm adding another 1.5% of my capital to the position.

I noted last week:

In my previous buy recommendation, I highlighted why I continued to like the REIT NorthStar Realty. While its recently split-off NorthStar Asset Management (NYSE:DBRG) offers more pure upside, the REIT offers lower downside due to the high dividend. But you won't find the dividend reported accurately on the usual public finance sites or with most brokers.

At its current price, I think NorthStar will yield about 9% on a forward basis. That's based on its payout ratio in the first quarter, as well as the company's projected 2014 cash available for distribution of $1.58 to $1.70 per share.

With that kind of payout, we could expect the stock to trade up to roughly a 6.5% yield. That would price the stock at $23, or about 35% above today's price. Add in the yield, and I think the stock could offer around a 50% return over the next year.

Foolish bottom line
So my Special Situations portfolio is putting $1,000 into NorthStar Realty Finance again this week. As I announced last week, if the stock lingers around today's prices, I expect to buy more in the following weeks and to keep buying. This is one of the most attractive positions in my portfolio.

Follow me on Twitter: @TMFRoyal. And check out my dedicated discussion board.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.