Preferred Stock Investing-The Good , The Bad and The In Between 2015 - 2020

[Coolius]

Anybody who jumped in on TCF-B a few weeks ago is seeing exactly how a past call "should be called but hasnt" reacts. It just creeps upward. Easiest simplest short term trade of the year in terms of safety and price support. Probably will level off a bit soon until the next divi gets declared as market is very suspicious of a call.

Yes, this is an almost textbook example of call fears affecting the Preferred price.

Those who bought TCF-B at or below $25.47, have offset the over-par premium with the dividend on September 1. Then its just a matter of hoping they will not call.

Every day without a call, after Sept 1, means 1/2 cent/share earned - a 7.4% annualized ROR.

I was a little late to the party, but managed to buy 800 shares @ $25.46 last week.

 

[MooreBonds]

Farmland Partners Inc. is issuing a new preferred share with an interesting twist where redemption of the preferred can be more than $25 if Farmland prices increase in the states where they do business. It is set to price at an initial 6% dividend yield. Interesting preferred REIT stock with a different type of asset class

Farmland Partners Inc. Announces Pricing of Public Offering of 6.00% Series B Participating

Thanks for the heads-up RM. I see where Farmland is already trading under it's permanent symbol (FPI-B). I took a chance on 95 shares in a tax-advantaged account (only had $2,4xx in free cash).

I also gambled on a few hundred MHLD ($7.195) and MH-A ($25.46) in taxable, since those dividends are both qualified, whereas the FPI-B isn't qualified. Also, there's a bit more risk with the MHLD issues. Here's to hoping it's book value is genuine and doesn't blow up any more, and I get the MH-A call notice on my 50th birthday!

 

[Mulligan]

Preferred Stock Investing-The Good , The Bad and The In Between

Thanks for the heads-up RM. I see where Farmland is already trading under it's permanent symbol (FPI-B). I took a chance on 95 shares in a tax-advantaged account (only had $2,4xx in free cash).



I also gambled on a few hundred MHLD ($7.195) and MH-A ($25.46) in taxable, since those dividends are both qualified, whereas the FPI-B isn't qualified. Also, there's a bit more risk with the MHLD issues. Here's to hoping it's book value is genuine and doesn't blow up any more, and I get the MH-A call notice on my 50th birthday!

You are braver than me Moorebonds...CEO promised a couple weeks ago MH-A will be called by end of year...If they dont follow through with a call on a 8.25% issue after following dividend. I am out the door!!! Because that would mean there is a reason why it wasnt called....And it sure as hell wont be a good reason or one I am willing to wait and find out why.
Tip toed into my first MLP...Bought some EPD at $24.92 today.

 

[aja8888]

Tip toed into my first MLP...Bought some EPD at $24.92 today.

You are in my league now. Also look at MMP.

Words of caution: Never, I mean NEVER, buy an MLP that is tied to the production of oil & gas.

Midstream is where you want to be, but only in the "best" partnerships.

 

[Mulligan]

You are in my league now. Also look at MMP.



Words of caution: Never, I mean NEVER, buy an MLP that is tied to the production of oil & gas.



Midstream is where you want to be, but only in the "best" partnerships.

I had to start somewhere, figured a safe one was the way to go...6.75 % is quality to me... I dont understand all the top down structure of MLPs... EPD has stripped itself of all the parent or drop down fee draining crap that I dont understand at all... And I didnt use the formal wording as I forgot what it is called...So it seemed more true and stable and still has investment grade status...I doubt if I stray much from here...Maybe add a bit over time if it presents itself.

 

[aja8888]

I had to start somewhere, figured a safe one was the way to go...6.75 % is quality to me... I dont understand all the top down structure of MLPs... EPD has stripped itself of all the parent or drop down fee draining crap that I dont understand at all... And I didnt use the formal wording as I forgot what it is called...So it seemed more true and stable and still has investment grade status...I doubt if I stray much from here...Maybe add a bit over time if it presents itself.

Sticking with EPD is a good strategy as it is the cream of the crop. Magellan Midstream (MMP) is in there with it. Both transportation companies and like the post office, they get paid to deliver the goods.

You will get a K-1 for tax reporting next year but that is easily handled by any of the good tax software programs. It adds a few minutes to your tax preparation work and the K-1 data is downloaded from EPD's site. Unless you sell, there is generally no tax owed (unless you bought 50,000 units and trigger an internal income level (unlikely)).

I have been in EPD for a decade or so and it's a cash cow. Keep it forever.

 

[Mulligan]

I still got the training wheels on and only bought 300 shares. And chicken of the K-1 I stuffed it in my Roth, and will be under $1000 UBTI here this year as I pulled most of my K-1 trading shenanigans in my HSA about hit my limit there..
Long term if I get more I will have to man up and put in taxable and deal with K-1s.

 

[Mulligan]

Preferred Stock Investing-The Good , The Bad and The In Between

Aja, I was told you get a 5% discount reinvesting "payments". Do you know that to be true? I didnt invest for that reason, but was told afterwards. If so, I will just reinvest.

 

[aja8888]

Aja, I was told you get a 5% discount reinvesting "payments". Do you know that to be true? I didnt invest for that reason, but was told afterwards. If so, I will just reinvest.

I believe so for EPD that they discount the reinvested price the 5%.

 

[Mulligan]

I believe so for EPD that they discount the reinvested price the 5%.

Well consider it done!

 

[Texas Proud]

I believe so for EPD that they discount the reinvested price the 5%.

Does it matter where you hold the shares? I had heard/read that you have to be in the company reinvestment plan to get a discount..... IOW, if you hold shares in a brokerage you got regular price...


Now, I could be very wrong here.... just asking...

 

[aja8888]

Does it matter where you hold the shares? I had heard/read that you have to be in the company reinvestment plan to get a discount..... IOW, if you hold shares in a brokerage you got regular price...


Now, I could be very wrong here.... just asking...

I don't reinvest as I use EPD for cash generation. You can get the discount even if you hold shares in a brokerage account:

http://www.enterpriseproducts.com/investors/distribution-reinvestment-plan

https://seekingalpha.com/article/266579-getting-into-enterprise-product-partnerss-drip-at-a-discount

 

[Mulligan]

I don't reinvest as I use EPD for cash generation. You can get the discount even if you hold shares in a brokerage account:

http://www.enterpriseproducts.com/investors/distribution-reinvestment-plan

https://seekingalpha.com/article/266579-getting-into-enterprise-product-partnerss-drip-at-a-discount

Good deal, Aja...I was worried like Texas was it had to be direct as some are... The guy who told me about the 5% THOUGHT it worked through brokerages but wasnt sure. Looks like your link suggests he was correct...Im going to find out next divi!

 

[Texas Proud]

Good deal, Aja...I was worried like Texas was it had to be direct as some are... The guy who told me about the 5% THOUGHT it worked through brokerages but wasnt sure. Looks like your link suggests he was correct...Im going to find out next divi!

I would make sure that the new shares land in the brokerage account... not a separate account for the DRIP....

My mother has a DRIP with physical shares she owns... but the DRIP shares are in a separate account...

 

[RicDee]

Your post have been very helpful.
I have purchased AILLL at $26.15 and CNLPL at $53.27.
And am looking for the next one while I wait for Bac-L and WFC-L and others to come down.
Anybody own anything for me to buy and hold now?

 

[Coolius]

RicDee,

Congrats on your purchase of AILLL & CNLPL, you got them at good prices.

These should be the core of your Buy & Hold portfolio - unless they get called, hopefully never.

If QDI is not a concern for you, and you are willing to accept a sub 6% yield, check out NEE-H, which I own.

This is Nextera, a very stable utility. NEE-H is past call, but trading within 1 dividend of par, so next dividend in September ( already declared ) will bring your effective cost basis below par.

Once your cost basis is below par, you can enjoy the 5.56% yield indefinitely until the issue is called, whenever that may be.

NEE-H dividends are not QDI. The yield of 5.56% is not that attractive, but the dividend stream should be very reliable - the major risk is that of a call.

 

[Mulligan]

Ric, if conservative income is what you are looking for, I think LANDP is a great option...Even at close price of $26.03 that is still at 5.25% YTM at its 9/30/2021 date. This issue checks off so many boxes it isnt funny... Term date, escalator clause if they dont, company backed by a physical asset (land), monthly payer. Safely capitalized. I wish there were more of these...I would much rather own a 5.25% term date of just 4 years than a 6% perpetual. Yes first call date is 9/2018 but Gladstone has a rep of carrying them to edge of maturity.

 

[Mulligan]

BPFHP is a reasonable value here at under $25.60.... Whether it gets called at call date or stays outstanding if rates creep up, it is one of the better value issues for a minimum year hold. I trade in and out of it myself.

 

[RE2Boys]

Your post have been very helpful.
I have purchased AILLL at $26.15 and CNLPL at $53.27.
And am looking for the next one while I wait for Bac-L and WFC-L and others to come down.
Anybody own anything for me to buy and hold now?

Could look at MNR-C, a REIT preferred, 6.125% cumulative, call date 9/2021, currently selling at $25.10

 

[Mulligan]

Made a minor trade today. Landed 71 shares of UEPCO. More of a trade to try to move my utility preferred ratio back up closer to what I originally had. Been getting a bit loose lately. Its worked, but like most things it does until it doesnt. Still need to reposition more and hopefully at better yields. But until TCF-B and MH-A play out, it probably wont happen.

 

[Texas Proud]

Just noticed a partial call for AHT-PD....


Had 400 shares and 66 of them were called... price.... $25.457709 per share... so I will lose a bit on each share as I paid $25.59... but I did get one divi...


At least 100% was not called... then again, it makes another one that I bought into the called category....

 

[Mulligan]

They completely called AHT-A with same new 7.5% issue they just sent to market this past week. I think they called 20% of AHT-B.

 

[Coolius]

On the day of the partial AHT-D redemption announcement, sold 1/3 of my shares at $25.50.

Haven't tried to sell the rest of the shares, so don't know if broker has set aside some for the redemption.


Edit: I joined the Mulligan Glee club of LANDP today. A seller decided to dump, and my $25.99 GTC bid was taken out just like that.

 

[RicDee]

Thanks for the info on
NEE-H, LANDP, BPFHP and MNR-C
I am working on those.
Coolius mentioned MTB- is that worth looking at now?

 

[Mulligan]

Thanks for the info on

NEE-H, LANDP, BPFHP and MNR-C

I am working on those.

Coolius mentioned MTB- is that worth looking at now?

I saw last trade was $1030...That is incredible value...But it appears last trade was over a week ago. Very wide bid/ask prices so be careful. I would suggest this one would be a prime call issue due to its origination purpose, so proper entry price point is needed here.

Well sorry, Aja, my MLP career didnt last long...It jumped $1.20 in a couple days..I had to sell and lock in the easy gains! If I get in these long term I have to buy in taxable and hold long term.