Preferred Stock Investing-The Good , The Bad and The In Between 2021

[brokrken]

How? I've used quantum's screener and to my knowledge, quantum can't do yield-to-call or market yield. Is there a page in quantum that I missed?

Sorry, you’re right, it doesn’t do all of that. I use my own spreadsheet for that stuff. I know it’s not elegant but works for me

 

[Texas Proud]

I'm close to being done with Fidelity. Amazingly, Vanguard allows me to buy certain tickers online that Fidelity does not. The tickers that Fidelity requires me to call in rather than order online are not exotic at all. I was working around it for a while by simply selling a ticker that Fidelity would let me buy in my Vanguard account and then buying it there and then using the proceeds to buy the ticker that fidelity prohibited me from buying in my Vanguard account... but that is a hassle so I think I'll just rollover the Fidelity tIRA to my Vanguard tIRA.

Does anyone with experience with both see any downsides to jettisoning Fidelity? I'll still have his and her HSA accounts at Fido so I'll still be able to access their website and tools.

I am looking to leave Vanguard and Fidelity was an option... but like you it is not anymore...


IIRC it was stated that you could not buy a variable rate issue through Fidelity... that was what tripped me up...


I do have another account with Merrill Edge and it seems OK, but I just do not do enough with them to say if it is the one I will move too... one benefit is that they have a bonus reward rate to their CC if you have enough included....


I think I might try Schwab soon and see if they are the winner... but as of now Vanguard is still my default...

 

[Sunset]

I am looking to leave Vanguard and Fidelity was an option... but like you it is not anymore...


IIRC it was stated that you could not buy a variable rate issue through Fidelity... that was what tripped me up...


I do have another account with Merrill Edge and it seems OK, but I just do not do enough with them to say if it is the one I will move too... one benefit is that they have a bonus reward rate to their CC if you have enough included....


I think I might try Schwab soon and see if they are the winner... but as of now Vanguard is still my default...

Merrill Edge will also give you a bonus just for the move, up to $600 for most folks (but if you are moving a lot more than $200,000 , they will go higher).
https://www.merrilledge.com/cmaoffer

 

[bobandsherry]

Ah, that's an idea. I may go that way.

One thing that I've been looking for that it seems that neither Vanguard or Fidelity can do is to screen preferreds the way I want.

I don't know if you've seen this, it's not an online screener tool, but has all the data in a Google Sheet and let's you create your own filtering. Lots of details about each issue, about 650 issues included. And it doesn't have a YTC, but does have a YTW.

https://innovativeincomeinvestor.com/sortable-spreadsheet-new-instuctions/

 

[pb4uski]

Thanks. Yes, I have seen that and it is the closest thing that I have found to what I am looking for.

 

[pb4uski]

PB, I switched everything to Schwab a few years back (moving what I had at both Vanguard and Fidelity over). Much easier user interface and I never have the problems that you encounter.

Ah, that's an idea. I may go that way.

One thing that I've been looking for that it seems that neither Vanguard or Fidelity can do is to screen preferreds the way I want. Let's say I have some money to invest. I'd like them to run a screen of preferred stocks that have certain ratings (say BB- or better), a market yield of x% or more, a yield-to-call of y% or more, etc. I can easily find the first 2 and I can find some data on the YTC, but I haven't found anything that can do all 3. Does Schwab have anything like that?

I decided to give Schwab a try. They make it frightenly easy to create and account and to set up a transfer of assets from my Fidelity tIRA to my new Schwab tIRA. Probably all of 5 minutes for each step and all online.

I also like their preferred stock screener tool... I would like it even better if it included yield-to-call in addition to market yield. Another neat eature is that you can look at market yields for all issues of a particular issuer on a single screen.... below is an example of WFC preferreds.

 

[pb4uski]

Since I had a few posts in the old thread regarding yield-to-call information and calculators, etc. I figured that I would share this that I found on QuantumOnline.... not sure how old it is as the page I found it on isn't dated... but it is consistent with what I have found... which is nada (other than innovativeincomeinvestor tables include YTW info but they say that it is understated).

QuantumOnline does plan of offering Yield to Call (YTC) and Yield to Maturity (YTM) information in the future but at this point we can't say exactly when it will be. In our case, we first have to find a source of affordable current price quotes that we can use on the website and as the basis of the YTC & YTM calculations before we can even begin the programming on the yield information. We also have to find some good formulas for making the yield calculations that do not unduly slow down the loading of our tables.

We also do not know of any other website that offers YTC and YTM information or even YTC and YTM calculators. One suggestion we have in this regard is that some of the Financial Calculators (Hewlett-Packard, Texas Instruments, etc.) do offer YTC and/or YTM calculations. A second suggestion is that it is our understanding that Excel spreadsheets also offer YTC and/or YTM calculations but we have never attempted to confirm this ourselves.

 

[bobandsherry]

Since I had a few posts in the old thread regarding yield-to-call information and calculators, etc. I figured that I would share this that I found on QuantumOnline.... not sure how old it is as the page I found it on isn't dated... but it is consistent with what I have found... which is nada (other than innovativeincomeinvestor tables include YTW info but they say that it is understated).

They say that necessity is the mother of invention. Maybe hook up with a coder and the two of you can create a site. Go the way of Quantum and request donations to recoup / offset your development and operational costs. Then maybe market it to other companies that offer screeners. Never you what that can turn into.

 

[pb4uski]

I'm retired and not looking for a job.

 

[brokrken]

I'm retired and not looking for a job.

 

[Coolius]

The recent jumps in the 10 yr UST rate has caused some panicky knee jerk reactions in the preferred/income sector.


Might be a good time to watch if buying opportunities emerge.


For example, POWER REIT Pfd, PW-A, now down to $25.30 or so. Accrued interest plus the 30 day notice is about $0.32 , so even if called tomorrow for Feb 12, one would receive $25.32. If not called, then yield is about 7.5% until such time as they do call.


Bear in mind that call risk is very high, this is not a buy and hold issue. I would be ecstatic if the next complete dividend were paid out.

 

[Texas Proud]

OK... I used to use dividends.com to look at upcoming ex divi dates and trade on them... but now it is a premium site...


Any other sights that will give upcoming ex-divi dates for pref shares?

 

[pb4uski]

The recent jumps in the 10 yr UST rate has caused some panicky knee jerk reactions in the preferred/income sector.


Might be a good time to watch if buying opportunities emerge.


For example, POWER REIT Pfd, PW-A, now down to $25.30 or so. Accrued interest plus the 30 day notice is about $0.32 , so even if called tomorrow for Feb 12, one would receive $25.32. If not called, then yield is about 7.5% until such time as they do call.


Bear in mind that call risk is very high, this is not a buy and hold issue. I would be ecstatic if the next complete dividend were paid out.

Why do you say that it is not a buy and hold issue? Do you expect it to be called soon? Looks like yield to call is ~0% and if it is called a year from now the yield would be 6.5% and it just gets better after that to as much as 7.67%. Just trying to understand the reasoning for the comment.

 

[pb4uski]

OK... I used to use dividends.com to look at upcoming ex divi dates and trade on them... but now it is a premium site...


Any other sights that will give upcoming ex-divi dates for pref shares?

https://innovativeincomeinvestor.co...ulative-redeemable-perpetual-preferred-stock/

 

[Coolius]

pb,


Call risk is exceptionally high with this issue, I expect a call soon. It is way past FC, recent rumblings out of the company have raised call concerns.



I do not know the exact details, but Mulligan is usually on top of these things, so I hope he will chime in and provide the details.


It closed at $25.30 today, buying at this level is not a risk as accrued interest already baked in provides a gain ( although minuscule ) even if called tomorrow.


I do not expect it to remain outstanding much longer, but maybe, just maybe, if they decide to push out the call for a quarter or two.....who knows?

 

[Mulligan]

pb,


Call risk is exceptionally high with this issue, I expect a call soon. It is way past FC, recent rumblings out of the company have raised call concerns.



I do not know the exact details, but Mulligan is usually on top of these things, so I hope he will chime in and provide the details.


It closed at $25.30 today, buying at this level is not a risk as accrued interest already baked in provides a gain ( although minuscule ) even if called tomorrow.


I do not expect it to remain outstanding much longer, but maybe, just maybe, if they decide to push out the call for a quarter or two.....who knows?

Coolius, geez I got an assload of this one today. But I have been in and out of this one since probably around 2014 or so. I bought around 25.37, then a bunch at 25.07 and again at 25.13.
The reason for call risk is this...This did a recent secondary common offering for about $50 million. They said it was for future acquisitions, but also was generically stated it could be used to redeem debt and or preferreds. The preferred is only about $4 million. Its genesis was cash raised to fight NorFork Southern (I think that is the RR they lease line to) a legal battle and break the perpetual lease (it failed). The company has went from a sleepy rail line reit, to some solar farms, and now big into pot land to grow weed. The common stock has just exploded...
If by some miracle its not redeemed I will lighten my load when it drifts up. This has been on stable preferred. While most preferreds were crashing 50-75% briefly in March, this one barely and briefly drifted below par to around $24.
About 10% of the float has rolled the past 2 days. Someone is getting call antsy dumping especially down at $25.07 as that was a flat giveaway to me.

 

[Mulligan]

Now is the time to be careful with rising rates. Typically lower yielding IG issues get the heat first. I have been the past month or so drifting into higher yielding issues and ones that should have been called but havent...Such as UZA, TDE... Others such as PW-A, ABR-A and shorter duration notes such as SCCC and SESCF. Some I own especially some illiquids, I will just bite bullet and let them drop if they do..So be it, I will use divis to buy more lower. I cant drift totally to other end of credit risk to overly protect capital erosion from dropping prices from higher interest rates.

 

[pb4uski]

I don't look at my preferreds very often, but Mully's post above caused me to. Altagas ALTGF and Enrbridge EBBNF both had big gains today... 3.50% and 2.86% respectively. But why?

They had taken a beating back in the spring when the SHTF but have recovered and are now both at nice gains.

 

[Mulligan]

I don't look at my preferreds very often, but Mully's post above caused me to. Altagas ALTGF and Enrbridge EBBNF both had big gains today... 3.50% and 2.86% respectively. But why?

They had taken a beating back in the spring when the SHTF but have recovered and are now both at nice gains.

PB, Because these trade “anti” to fixed perpetuals. When expectations of higher interest rates happen these will rise. And when rates are dropping they fall. I just sold the only one I had a day or two again. It popped 20% in two months so I took the money and ran, lol.

 

[bobandsherry]

Heads Up on Golar LNG Partners

I saw a pop in my GMLPP today, up 12% (yahoo!).... saw this news:

MW New Fortress Energy to acquire Hygo Energy Transition and Golar LNG Partners in $5 billion combined deal

New Fortress Energy Inc. (NFE) said Wednesday it has agreed to acquire Hygo Energy Transition Ltd. and Global LNG Partners LP (GMLP) in a combined deal valued at $5 billion. The deal will make New Fortress the leading gas-to-power company in Brazil, the company said in a statement. Hygo is a 50-50 joint venture between Golar LNG Ltd. (GLNG) and Stonepeak Infrastructure Fund II Cayman Ltd., a fund managed by Stonepeak Infrastructure Partners. "The addition of Hygo will quickly expand our footprint in South America with three gas-to-power projects in Brazil's large and fast-growing market," New Fortress Energy Chief Executive Wes Edens said in a statement. "With GMLP, we gain LNG ships and world-class operators that are an ideal fit to support our existing terminals and robust pipeline." Under the terms of the deal, New Fortress will acquire all of Hygo's shares for 31.4 million of its own shares, pulse $580 million in cash. That deal has an enterprise value of $3.1 billion and an equity value of $2.18 billion. GLNG will receive 18.6 million New Fortress shares plus $50 million in cash, while Stonepeak will receive 12.7 million New Fortress shares plus $530 million cash. The deal is expected to close in the first half. In the case of Golar LNG Partners, New Fortress will pay $3.55 per common unit is cash, in a deal with an enterprise value of $1.9 billion and an equity value of $251 million. That deal is also expected to close in the first half. New Fortress shares were up 2.7% premarket, while Golar LNG was up 15% and Golar LNG Partners shares rose 16%

 

[brokrken]

Finally got my head above water on SPLP-A with the pop today. So, I dropped them. Overall not a bad investment. Got that 30% put at par a while back (which was the reason for buying), made the divies (including that 1 we got in shares) and sold out at a slight gain.

Also on PBI-B, I'm sitting on nearly 3 years worth of divies in cap gains, so I have an ask out there and we'll see if anyone grabs it.

Not so worried right now about where to put the proceeds as I expect we'll have plenty of opportunities in the next 6-12 months.

 

[Sunset]

So how do other people feel about SPLP-A.
I was certainly peeved at the time they did the share distribution for a dividend.
But I still like the ~7% dividend rate (when paid in cash)

Is this an opportunity to get out, or is it pretty safe and maybe even will be called in 2026 for a nice price pop

 

[brokrken]

So how do other people feel about SPLP-A.
I was certainly peeved at the time they did the share distribution for a dividend.
But I still like the ~7% dividend rate (when paid in cash)

Is this an opportunity to get out, or is it pretty safe and maybe even will be called in 2026 for a nice price pop

It actually matures in ‘26, not just callable.

 

[pb4uski]

So how do other people feel about SPLP-A.
I was certainly peeved at the time they did the share distribution for a dividend.
But I still like the ~7% dividend rate (when paid in cash)

Is this an opportunity to get out, or is it pretty safe and maybe even will be called in 2026 for a nice price pop

I dunno... fool me once, shame on you, fool me twice, shame on me.

 

[Mulligan]

Congrats Bob and Ken. Everything appears to be going well in preferred land or at least the ones I monitor.
I just havent followed Steel Partners enough the past couple years to offer anything.
CNIG has an offer to be bought out at $24.50 which made the preferred CNIGP worth $29.70, plus a couple or three more dividends in addition while waiting for regulatory approval. I missed my chance to load up as I went golfing. But market wasnt totally aware of the 1.2 conversion multiplier so I bought a slug Thursday at $27. Approvals on this will be a breeze so it should be easy money hold for me. They do have a 45 day shop window so if someone offered more then the return would be even better.