Wednesday, July 1, 2015

Preferred Stock Market Q2 2015: Investment Grade Preferred Stocks Available Below $25

It’s time for preferred stock buyers to start paying attention. In anticipation of a September 2015 Fed interest rate hike, the average market price of preferred stock shares fell to $25.03 at the end of June, a drop of $0.62 per share over the last three months. With lower prices come more sub-$25 candidates paying higher returns – the hallmark of a classic buyer’s market...

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Monday, June 1, 2015

Preferred Stock Buyers - History Suggests That June Could Bring Higher Returns For Lower Prices

Lower preferred stock prices could become available as early as this month, as June payers clear their June ex-dividend dates. In both of the two most recent cases, the price of high quality preferred stocks started dropping three to four months prior to the announcement of a federal funds rate increase. If Fed Chair Janet Yellen's most recent statements mean an announcement following this September's FOMC meeting, and sellers behave the same way as they have the last two times, preferred stock buyers could see higher dividend payers at lower market prices very soon...

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Monday, May 4, 2015

Allstate Insurance Corporation Preferred Stocks: Opportunities And Risks

Allstate issued one ETD and five preferred stocks within eighteen months, ending in June 2014, raising about $2.2 billion. Through 2014, the company repurchased common stock, also valued at $2.2 billion, essentially converting voting common equity into non-voting preferred equity and $500 million in new debt. These six income securities from Allstate offer long-term, stable income with low default risk and the five preferreds are designated as being QDI tax-advantaged. But they also come with risks...

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Monday, April 6, 2015

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.

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Wednesday, March 4, 2015

How To Rate An Unrated Preferred Stock

Over the last few years we have seen an increase in the number of new preferred stocks that are unrated by either Moody's Investors Service or S&P. There are a number of reasons that a company will choose not to have its preferred stocks rated that have nothing to do with the company's wellbeing.

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...

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Monday, February 2, 2015

Preferred Stock Versus Common Stock Investing Results

The common stock market had a great year last year, gaining 11.5 percent. And by the end of 2014, the average market price of high quality preferred stocks was $25.98 per share, a value gain of 9.5 percent.

But while the preferred stock value gain of 9.5 percent was not as impressive as the 11.5 percent seen by common stock investors, preferred stock investors realized substantially better dividend income throughout the year...

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Tuesday, January 6, 2015

Preferred Stock Buyers Change Tactics For Double-Digit Returns

Dramatically falling oil prices throughout the fourth quarter of last year have reduced inflation pressure, delaying, once again, any hope of a rate increase. On December 18, 2014 Fed Chair Janet Yellen stated that the Fed "…could continue to be patient." For preferred stock investors, downward pressure on rates means upward pressure on prices.

During such periods, savvy preferred stock investors can frequently purchase shares at wholesale (sub-$25) prices when new preferred stock issues are being distributed to the market. 83 percent of the non-convertible preferred stocks issued during 2014 (54 of 65) were introduced to the market by their underwriters using a temporary trading symbol on the wholesale Over-The-Counter (OTC) stock exchange. So how did buying shares during OTC distribution work out for preferred stock buyers during 2014?...

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