Entering text into the input field will update the search result below

New Preferred Stock IPOs, November 2018

Dec. 03, 2018 7:00 AM ETBHR, ESGR, GLAD, GLADD, GLOP, GLOP.PC, WHF, WHFBZ, BHR.PD34 Comments


  • Five new preferred stocks were introduced during November, offering an average annual dividend of 7.3 percent.
  • There are currently 126 high quality preferred stocks selling for an average price of $23.21 per share (investment grade, cumulative dividends).
  • 95 of these high quality issues are now selling below their $25 par value, offering an average current yield of 6.0 percent.
  • U.S.-traded preferred stocks are now returning an average current yield of 7.2 percent.

The Federal Open Market Committee is scheduled for a two-day meeting December 18 and 19 and is widely expected to increase the federal funds rate for the fourth time this year.

As rates go up, market prices of fixed-return income securities (preferreds, bonds) come down, creating a buyer-friendly market for preferred stock investors.

For preferred stock buyers, upward pressure on interest rates boosts the dividends paid by new issues, increasing your income, and lower prices bring not only cash savings on your share purchases but higher yields since you earn the same dividend income without having to invest as much of your cash; your income, cash balance and yield all respond favorably to the Fed’s interest rates increases.

I’ll show you a chart of this shortly, but in response to increasing rates, the average market price of U.S.-traded preferred stocks fell by $1.89 per share this year, now sitting at $23.79, creating the best opportunity for preferred stock buyers that we have seen since 2016.

Importantly, note that $23.79 is below these securities’ $25 par value. Remember that the par value is what shareholders will receive in cash should the issuing company decide to redeem your shares so buying shares below par sets you up for a downstream capital gain on top of the regular dividend income provided by these securities.

November’s new issues

November’s five new preferred stocks are offering an average annual dividend (coupon) of 7.3 percent compared to 7.0 percent from October’s new issues.

Note that I am using IPO date here, rather than the date on which retail trading started. The IPO date is the date that the security’s underwriters purchased the new shares from the issuing company.

Regarding BHRPP: Notice that I am using the temporary OTC symbol BHRPP for the new preferred stock from Braemar

This article was written by

Whether you are the kind of investor who sticks with preferred stocks with a CDx3 Compliance Score rated 10 out of 10, or whether your portfolio has room for 9-score-and-lower securities, stay tuned for future articles recapping new IPOs and interesting preferred stock activity that we notice here at the CDx3 Notification Service.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

The CDx3 Notification Service is my preferred stock email alert and research newsletter service and includes the database of all preferred stocks and Exchange-Traded Debt securities used for this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.