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

[Dan32]

Does anyone have an opinion on AFSI/A or AFSI/D? I've owned the common stock for a while. AFSIpA is 23.97 with a dividend rate of 7.04. AFSIpD is25.29 with a dividend of 7.42%.

[Mulligan]

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Originally Posted by Dan32 Does anyone have an opinion on AFSI/A or AFSI/D? I've owned the common stock for a while. AFSIpA is 23.97 with a dividend rate of 7.04. AFSIpD is25.29 with a dividend of 7.42%.

Sorry Dan. I don't know anything about them. I have played around with property and casualty preferreds making a quick buck on a divi and cap gain here and there, but really don't have any understanding of their finances. That is a reflection of my poor abilities not a negative in any way on investing in them.
My personal "No Go's" are MReits, BDC's, shippers, and anything in energy outside of public utilities.


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[Mulligan]

Quote:

Originally Posted by Dan32 Does anyone have an opinion on AFSI/A or AFSI/D? I've owned the common stock for a while. AFSIpA is 23.97 with a dividend rate of 7.04. AFSIpD is25.29 with a dividend of 7.42%.

Just as a reminder in case you do not know. One who owns the common shares of a company would not have a problem in owning the preferreds as they set above common in capital structure. A common stock dividend cannot be paid out until preferred dividend is paid first.
Most people work the opposite in way in they own the preferred as a safer play than buying the common...along with of course the usually higher paying dividend. If common divi is higher than the preferred is, that can possibly be a very foreboding statement on the viability of the common stock dividend's future.


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[Dan32]

Thanks, anyway. The common stock showed up on a screen I did some time ago and has done well for me. I have a few of the preferred utilities already mentioned in this thread. I was intrigued by AFSIpA because it is below par with an interest rate above 7 and decent volume. I have an order in at a limit price that may be too low to exercise, but since the record date is March 1 for the next dividend, I'll be patient.

[Mulligan]

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Originally Posted by Dan32 Thanks, anyway. The common stock showed up on a screen I did some time ago and has done well for me. I have a few of the preferred utilities already mentioned in this thread. I was intrigued by AFSIpA because it is below par with an interest rate above 7 and decent volume. I have an order in at a limit price that may be too low to exercise, but since the record date is March 1 for the next dividend, I'll be patient.

Patience is a good thing.


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[Mulligan]

Since a few of us apparently have some preferreds, I would be curious to see what some other people own now....I will give my list... 3 Ameren Illinois issues, 3 issues under Excelon, a Pacificorp issue, Connecticut Light and Power, CHSCL, Wells Fargo- L, AES Trust issue, Monmouth Realty, Dominion Resources adjustable issue, AT&T baby bond, Ashford Hospitality (oops forgot that one, I have 2 reits) a hotel reit.


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[Coolius]

Here is my list:

CHSCL
CNLPL
CNTHP
AILLL
BGE-B
BGLEI
GLFPN
WFC-L
HE-U

and other conventional preferred issues ( much smaller holdings ).

[Mulligan]

You not have the Indianapolis Light and Power issue anymore Coolius?


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[Coolius]

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Originally Posted by Mulligan You not have the Indianapolis Light and Power issue anymore Coolius? Sent from my iPad using Tapatalk

Yes I have a small position in IPWLK. It's not a full position so left it off list.

[Mulligan]

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Originally Posted by Coolius Yes I have a small position in IPWLK. It's not a full position so left it off list.

Hey, you dont have to exclude all issues under a million in value. Not all of us here are able to have "full positions" like you can.


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[Coolius]

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Originally Posted by Mulligan Hey, you dont have to exclude all issues under a million in value. Not all of us here are able to have "full positions" like you can. Sent from my iPad using Tapatalk

I wish !!!!

Just saw a trade for AILLL, 100 shares @ $25.90. Wonder if one of us ?

[Mulligan]

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Originally Posted by Coolius I wish !!!! Just saw a trade for AILLL, 100 shares @ $25.90. Wonder if one of us ?

It was a partial fill of someone who wanted 500 shares, but only got 100.... I almost got back in line to buy more before I bought MNR-A, but I am fully engorged on that position... That being said, I may get more with my fresh money next year. I would sleep fine with all my money in it.


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[Dan32]

I've only been adding individual preferred stocks in the last few months. I still have the ETF IDV as a dividend fund. Individual preferreds I have are: ANH-A, BANC-C, FULLL, and WFC-L. Although not a preferred stock an investment club I'm in has bought and sold BPT several times over the years. We last sold it in the 80s. It's now at 22.5 and pays a royalty of 25%. Even though I have a soft spot for stocks that have been good to me in the past, I can't convince myself that this is worth the risk and the tax hassle.

[Golden sunsets]

Do you two guru's of Preferred investing know why CHSCP yields 6.61% and is selling at $5.26 over par, but CHSCL yields 6.91% but is only selling at $2.10 over par? I must be missing something. Why would anyone purchase the first if they can get the second with less of a premium but a higher yield. I await your sage answers on my faulty reasoning.

PS Mulligan would you mind listing the tickers for your issues?

[Mulligan]

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Originally Posted by Golden sunsets Do you two guru's of Preferred investing know why CHSCP yields 6.61% and is selling at $5.26 over par, but CHSCL yield 6.91% but is only selling at $2.10 over par? I must be missing something. Why would anyone purchase the first if they can get the second with less or a premium but a higher yield. I await your sage answers on my faulty reasoning. PS Mulligan would you mind listing the tickers for your issues?

"Mediocre Amateur Investor" is my preferred name as opposed to "guru". The differences mostly have to do with call dates, Golden. P gets distorted because its so far above call price and is callable sooner by 2 years. Usually people assume a call, but that certainly doesn't mean it will happen. Plus simple supply and demand of each issue comes in play. "P" is an older higher paying one (par yield) and I assume less liquid since "L" was just issued this year.
They both are on the same level of priority so that doesn't come into play. Me personally I always take the highest yielder closest to par if no difference is priority. Some people will sell out of one issue and into another if opportunity presents itself in company issues.
Tickers are - AILLL, AILLI, AILNP, BGLEI, KTH, BGE-B, CNLPL, WFC-L, AES-C, GJP, KTBA, MNR-A, AHT-D, PPWLM, CHSCL.
Be careful with all of them....Yes, I love them all, but at the price I got and the dividends already received. And they may never be called. ....Some have been callable for 40 years, but that doesn't mean they wont be called tomorrow. If I am feeling frisky I may buy 2 divis above par, but only if next one has been declared. Only a few on the list are not past call.
If interested you need to be patient and set a price you can live with if they called it.




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[Mulligan]

Also I dont know what your tax situation is but be careful with that. Some of above are "qualified 15%" while others are treated like income. Since I would pay 31% as opposed to 21% with the qualified ones, I have make sure those are in either my Roth or HSA account.


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[Mulligan]

Quote:

Originally Posted by Dan32 I've only been adding individual preferred stocks in the last few months. I still have the ETF IDV as a dividend fund. Individual preferreds I have are: ANH-A, BANC-C, FULLL, and WFC-L. Although not a preferred stock an investment club I'm in has bought and sold BPT several times over the years. We last sold it in the 80s. It's now at 22.5 and pays a royalty of 25%. Even though I have a soft spot for stocks that have been good to me in the past, I can't convince myself that this is worth the risk and the tax hassle.

Thanks for throwing them out there, Dan. I like seeing what other people have. I am a little myopic in my choices so it is interesting to see other peoples issues. Many people like those short term "notes" with call dates. I don't understand mechanics of Mreits so I stay away. That doesn't mean they are bad though. If I read something and my eyes glaze over I don't invest in it. More of a reflection of my limited cranial capacity than an indictment on the sector.


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[Coolius]

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Originally Posted by Golden sunsets Do you two guru's of Preferred investing know why CHSCP yields 6.61% and is selling at $5.26 over par, but CHSCL yield 6.91% but is only selling at $2.10 over par? I must be missing something. Why would anyone purchase the first if they can get the second with less or a premium but a higher yield. I await your sage answers on my faulty reasoning. PS Mulligan would you mind listing the tickers for your issues?

CHSCP was the original issue, done in the early days of the co-op. The owners are overwhelmingly member-farmers, who keep it as an investment as well as support of the co-op itself. This makes the issue very thinly traded, and institutional investors tend to go for other series, as explained below.



CHSCO, CHSCL, CHSCN, CHSCM were subsequently issued, to finance the growing co-op as well as building of a Fertilizer plant ( terminated earlier this year ). These issues are larger and more widely held, by individuals, ETFs, MFs and Hedge Funds. So they are more liquid and more volatile.


That's my take on the subject; of course, I could be totally off track. If anyone has a another reason, I'm all ears.

[Mulligan]

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Originally Posted by Coolius CHSCP was the original issue, done in the early days of the co-op. The owners are overwhelmingly member-farmers, who keep it as an investment as well as support of the co-op itself. This makes the issue very thinly traded, and institutional investors tend to go for other series, as explained below. CHSCO, CHSCL, CHSCN, CHSCM were subsequently issued, to finance the growing co-op as well as building of a Fertilizer plant ( terminated earlier this year ). These issues are larger and more widely held, by individuals, ETFs, MFs and Hedge Funds. So they are more liquid and more volatile. That's my take on the subject; of course, I could be totally off track. If anyone has a another reason, I'm all ears.

I think you are right on track. If memory serves they were originally going to call it when it was callable the first time, but the farmers raised hell so they extended it. They loved that 8% coupon. Being the company is a co-op, they aren't too worried about squeezing every profit penny they can since ultimately that money is going to their "owners" anyways.


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[Winemaker]

How about these to make your eyes glaze over, Mr. Mulligan:

BBT-F, DLR-G, JPM-D, KIM-J, LTS-A, MS-A, NNN-E, PSA-W, RBS-L, RY-S, SCE-B, WFC-O, MER-K, MER-M, PNC-P, JPM-A, GS-A, MWG, WFC-P, and two ETFs, PGX and PGF.

Except for the ETFs, all were bought $2.00 under par or more, avg. yield of this portion of portfolio, 6.3% of cost. Over $12,000 in unrealized cap gains, half purchased in 2008 and half in 2014. Some still remain under par.

I was blessed with great timing at the right place; no skill on my part.