Preferred Stock Market Q1/2015: Investment Grade Preferred Stocks Available Below $25
- There are currently 39 investment grade preferred stocks selling for a market price below $25.
- The percentage of the market occupied by investment grade securities that are priced below $25 has fallen to 12 percent, down from 31 percent a year ago.
- Until the Fed starts backing out of our market, preferred stock investors will need to look harder to find high quality preferred stocks in today’s market for sub-$25 prices.
How To Rate An Unrated Preferred Stock
- Preferred stock issuers are not having their securities rated as frequently as they used to.
- Many unrated preferred stocks are issued by high quality companies that would otherwise earn investment grade ratings.
- Preferred stock buyers can use a 'Best-In-Show' approach to rate an unrated preferred stock without having to become an industry expert.
- With this approach, you no longer have to determine if the target company's key metrics are good or bad; you just need to see if they are better or worse.
Preferred Stock Versus Common Stock Investing Results
- While common stock value appreciation was 11.5 percent during 2014, preferred stock value appreciation ended the year at 9.5 percent.
- But common stock dividends only offered an average of 1.9 percent in dividend yield to shareholders, while high-quality preferred stocks offered 7.1 percent.
- While offering lower investment risk, combined preferred stock returns (value plus dividends) outperformed common stock returns during 2014.
Preferred Stock Buyers Change Tactics For Double-Digit Returns
- Gains plus dividends delivered an average 13.79 percent effective annual return to savvy preferred stock investors during 2014.
- 83 percent of the new preferred stocks issued during 2014 were distributed to the market using the wholesale Over-The-Counter stock exchange.
- The average 2014 OTC open price for newly introduced preferred stocks was $24.89 per share.
- In addition to the average 6.81 percent dividends, those same shares are selling for an average of $25.60 today.
Are Lower Tax Preferred Stock Dividends Really A Better Deal?
Dec. 2, 2014 • 35 Comments
- Most risk-averse preferred stock investors would probably avoid all but six of today’s Qualified Dividend Income preferred stocks.
- The lower coupon rate that QDI-designated preferred stocks offer often eliminates the tax savings when compared to similar non-QDI alternatives.
- Favoring QDI-designated preferred stock for your regular income (non-IRA) account may not be delivering the after-tax benefit that you’ve been counting on.
Preferred Stock Market Snapshot: Investment Grade Preferred Stocks Available Below $25
- 71 investment grade preferred stocks are now available for less than their $25 par value.
- Average preferred share price is at $25.16 after October's oil price plunge.
- Jittery value investors are creating volatility and opportunity for preferred stock buyers.
Preferred Stock Buyers - Be Sure You're Watching The Right Indicator
Editors' Pick • Sep. 22, 2014 • 50 Comments
- Due to the Fed’s cheap money policy, high quality preferred stock yields are about double the dividend yield provided by the same company’s common stock.
- Banks now hold $3 trillion in excess reserves beyond today’s regulatory requirements so changes to the federal funds rate will not be as effective as they have historically been.
- Income investors who are watching the federal funds rate as a leading indicator of rate direction are watching the wrong metric.
Apartment Investment And Management Co. Preferred Stock, Opportunities And Risks
- Dwindling distressed home inventory has produced an increase in apartment rental income and occupancy for AIMCO.
- Focused on earning an investment grade debt rating from Fitch, Q2 preferred stock issuance has helped to reduce debt and increase unencumbered property portfolio.
- Pending expiration of the tax credit compliance period will allow the company to start selling its affordable housing portfolio next year.
- The 28 percent YTD increase in AIMCO’s common stock price has pushed its yield down to 3.2 percent, making the company’s 6.7 percent preferred stock offerings more attractive.
Preferred Stock Buyers: Time To Change Tactics For Sub-$25 Purchases
- Contrary to economists' predictions, preferred stock prices have been increasing all year.
- Buyers are now accepting 0.78 percent less yield for the same risk.
- The price of Allstate's new Series F preferred stock increased by over $1 per share (4 percent) in 30 days.
- During periods of increasing preferred stock prices, buyers should change tactics to find sub-$25 prices.
American Realty Capital Properties Preferred Stock, Opportunities And Risks
- American Realty Capital Properties’ aggressive growth-through-acquisition strategy has increased the risk associated with the company’s common stock.
- The risks associated with recent transactions have increased the volatility of the company’s common stock and produced objections from shareholders.
- With a 7.3% current yield, a $2 discount to par and cumulative dividends, this REIT’s preferred stock may offer a lower-risk opportunity than the company’s common stock.
American Homes 4 Rent Preferred Stocks, Opportunities And Risks
- The three preferred stocks offered by AMH are unique in their structure.
- Shareholders are able to share in the appreciation of home values.
- Dividends are cumulative, but the securities are unrated for this new company.
Today's Preferred Stock Marketplace; What A Difference A Year Makes
- The highest quality preferred stocks are providing an average dividend yield of 6.75 percent.
- 6.75 percent is 1.9 times the dividend yield being provided by the same company's common stock.
- Rates have been stable during 2014 despite QE taper; income investors have already priced in QE exit.
Affiliated Managers Group Preferred Stock: Opportunities And Risks
- AMG offers two investment-grade Exchange-Traded Debt Securities.
- MGR is more suitable to today's risk-averse income investor.
- AFM has a non-competitive yield, and is consistently overpriced.
Goodbye Fed - 2014 Sees Preferred Stock Investors Shed QE Jitters
- 98 investment grade preferred stocks now available for less than $25.
- March price action implies complete QE exit already being "priced in" by preferred stock investors.
- Average yield for 40 highest quality preferred stocks now at 6.8 percent.
- AG Mortgage Preferred Stocks: Opportunities And Risks
- 2013 Delivers Higher Dividend Income At Lower Prices To Preferred Stock Investors
- Aflac, Inc. Preferred Stock Redefines Long-Term Income Investing
- Aegon, N.V. Preferred Stocks: Opportunities And Risks
- Variable-Rate Preferred Stocks Underperform Their Fixed-Rate Cousins
- Preferred Stock Yields Remain Stable Despite Weak Jobs Report
- Preferred Stock Or 10-Year Treasury Yield - Something's Got To Give
- Have Preferred Stock Investors Already Moved Beyond QE?
- Preferred Stock Yields Edging Up In Advance Of Fed Meeting
- All Investment Grade Preferred Stocks Are Not Created Equal
- Preferred Stock Dividend Yield Now Double That Of Same Company's Common Shares
- Why Falling Prices Should Be Welcomed By Preferred Stock Investors
- Preferred Stocks End July Favoring Buyers - Higher Reward For Lower Risk At Sub-$25 Prices
- 113 Investment Grade Preferred Stocks Available Below $25: Q2 2013 Update
- 5 New Preferred Stocks Clear 7%, First Time Since July 2012
- Preferred Stock Prices Return To Pre-QE2 Level, Bargain List Grows For Buyers
Preferred Stock Buyers: Time To Start Paying Attention
Jun. 12, 2013 • 63 Comments
- Investment Grade Preferred Stocks At 6.15%, Buyers Become More Risk Tolerant