Preferred Shares To Hold Forever: Crestwood And RLJ Lodging, Yields Up To 10.7%


  • Some people collect rare art, I collect dividend streams.
  • One elusive investment is preferred stocks that cannot be called.
  • These unique investments allow us to hold the shares and collect dividends forever.
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Co-produced with Beyond Saving

Today, we highlight two preferred stocks that can never be called.

  • Crestwood Equity Partners preferred shares CEQP- (CEQP.PR)
  • RLJ Lodging preferred shares RLJ-A (NYSE:RLJ.PA).

While it's becoming harder to find big bargains in the preferred stock space, there always are good opportunities. Both CEQP- and RLJ-A are still undervalued and offer a nice yield. These are two preferreds to buy and hold forever.

The Income Method is all about building a large and stable income stream from our investment portfolios. We value our portfolios just like we value the businesses we invest in, by their cash flow.

We have discussed before how preferred stocks can provide a lot of stability in terms of cash flow. A company cannot pay a penny of common dividends until the preferred dividend is paid in full. Also, many preferred equity investments are cumulative, meaning that in the event that the dividend is suspended, the amount owed will accumulate and will have to be paid to preferred shareholders in full before common dividends can be paid.

This makes preferred share investments a cornerstone of our high-yield strategy. While there are sometimes opportunities for capital gains, the primary goal of a preferred equity investment is for the large and stable dividend, a job that our preferred equity portfolio performed admirably even through the COVID-19 pandemic.

Today we look at two exceptional preferred share options. Both have unique features which means that they are very unlikely to ever be called.

In general, one of the negatives of preferred equity investments is that most have a "call" date, after which the company has the option to redeem the preferred shares at par value. While this means a realized gain if you bought the shares below par value, a company is only going to issue a call when it's in

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This article was written by

Rida Morwa profile picture
The #1 Service for Income Investors and Retirees, +9% dividend yield.

I am a former Investment and Commercial Banker with over 35 years experience in the field. I have been advising both individuals and institutional clients on high-yield investment strategies since 1991. As author of High Dividend Opportunities, the #1 service on Seeking Alpha for the 6th year in a row.

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In addition to being a former Certified Public Accountant ("CPA") from the State of Arizona (License # 8693-E), I hold a BS Degree from Indiana University, Bloomington, and a Masters degree from Thunderbird School of Global Management (Arizona). I currently serve as a CEO of Aiko Capital Ltd, an investment research company incorporated in the UK. My Research and Articles have been featured on Forbes, Yahoo Finance, TheStreet, Seeking Alpha,, ETFdailynews, NASDAQ.Com, FXEmpire, and others.

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Disclosure: I am/we are long CEQP.PR AND RLJ.PA. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: Treading Softly, Beyond Saving, PendragonY, Preferred Stock Trader, and Long Player all are supporting contributors for High Dividend Opportunities.

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