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

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53anddone said:
Nope, mostly on the sidelines at the moment.
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Why would you be hesitant to pay more than par/call price as long as the yield and Y-T-C are attractive? IOW, if the Y-T-W exceeds my yield target I don't mind paying more than par/call price.
 
53, Just a couple added thoughts. Reit preferreds do get a tax break now thanks to Trump tax cuts. Just not as much as a QDI preferred.

https://ldrcapitalmgmt.com/wp-content/uploads/2018/01/Tax-Reform-Commentary-1.2018wTable.pdf

My opinion on liquidity is a bit different. For example March 2020 preferred stock route was totally in liquid preferreds. Many IG liquid preferreds tanked close to 50%. While illiquid preferreds didnt hardly move a blip. It made me a killing...I sold my illiquids and rolled into the routed liquid IG preferreds and road them back to par, and then bought the illiquids back.
Of course if the float is 1000 shares and never trades you dont want to own 800 of them, lol... But I do own 101 shares of an old illiquid non callable ute that only has a tradeable float of less than 250 shares. But I aint ever selling, lol.
 
pb4uski said:
Now if I could only find one where I input the preferred stock ticker symbol and all the other fields are populated automatically!
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Man, if quantumonline did this it would be awesome. Seems like a logical upgrade to that site
 
+1 while I like quantumonline, I really hate having to jump back and forth from quantum to marketwatch or whatever to see prices and yields.

I did find the info on the Vanguard screener better than anything that I have seen... but if quantum could include price, yield and yield-to-call that would be the cat's meow.
 
pb4uski said:
Learned something new today.

I wanted to buy some RZB and Fidelity would not allow me to buy it online so I had to call in. From what the helpful guy at the fixed income trading desk said, it seems that to protect me that Fido doesn't allow online trades for any fixed-to-floating rate preferreds, even though the floating rate of 3-month LIBOR + 4.04% doesn't bite until June 2026 and the issue is rated BBB+ by S&P.

As part of the conversation I asked him if they had any useful screener tools for preferred stocks and baby bonds beyond the preferred stock screener. He said no and added that baby bonds were also on the list of things that I would have to call in on... though I was able to buy all the AGOPRB that I wanted so I'm skeptical on the baby bond thing.
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This is one of the reason that I am not moving a **** load of money to Fido...
 
pb4uski said:
Yeah... and I'm guessing that Vanguard would likely be even more restrictive than Fido.
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And you would be wrong.... I have not had Vanguard limit me from buying anything online... including the ones that Fido has....
 
I'm personally a bit skeptical about the future prospects for office and retail real estate, particularly in the NYC area... other fish in the sea for me.

Vornado Realty Trust is a real estate investment trust and conducts its business through, and substantially all of its interests in properties are held by, Vornado Realty L.P. (the Operating Partnership). Co. is the sole general partner of the Operating Partnership. Co. owns and operates office and retail properties with a concentration in the New York City metropolitan area. In addition, Co. has interest in Alexander's, Inc., which owns properties in the New York metropolitan area, as well as interests in other real estate and related investments.
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The other prefs of VNO are around par, but I dont get it. For the rate/risk, I'd avoid. I'd rather a pref like HMLP-A or ATCO (SSW) or many others than VNO. Some property REITS make sense (cell tower, server farms) but everyone know them and that so they dont pay so well. While politically sensitive I just bought some GEO bonds, as 13% seems good and I cant see the business going away in 3 years...
 
I agree. I mean low 5% perpetual is common as dirt. Why take it in a sector under stress and potential longer term problems from less need for office space?
 
Today I bought UBP/K. Selling for around 24.10 with a call in 2024, 5.85% coupon.

I buy and hold so will forget about this one and just enjoy 4 years of distributions.

I think the mothership is fine. Shares up 11% today.
 
53anddone said:
Today I bought UBP/K. Selling for around 24.10 with a call in 2024, 5.85% coupon.

I buy and hold so will forget about this one and just enjoy 4 years of distributions.

I think the mothership is fine. Shares up 11% today.
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53, Your plus 6% on price purchase. Since you most likely intentionally took the lower coupon issue, you may get a longer hold than 4 years. But you definitely get 4 years protection. UBP is a solid reit.
I have been holding my lower yielding safe stuff, and focusing on trading and playing more in the higher yield trash section as that has been the area of price movement. Will keep the sell button close by while doing this, lol.
 
Mulligan - I also own some of the H at about the same entry price - just distributing things. Bought the common for the IRA a few months back. Think I have enough UBA for now!
 
I'm in safe harbor mode, expecting a significant correction. I just got out of RILY Z/G and a few others. Kept DTJ, ALIN-E, HMLP-A, ATCO, and a few others I think are resilient to ups/downs over time, and are conservatively valued now. But I'd like to find some others (pref's and babys) that are over 6%. I have significant bonds in CXW and GEO. Any ideas?
 
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I think AGO-B is a good value... A rated by S&P, yields 6.28% but some call risk... currently callable and trading at a premium equal to about 1.4 years of interest. I got in a bit lower and decided to accept the call risk.
 
:popcorn:NGHCO and NGHCP are holding strong above par with a high div. It would seem others have caught on to the buyout expected by Allstate, or is there something else a float? I may own too many shares in this, but the corp financials are good and the Allstate deal I have not seen any negative news for months.....
 
Happyras said:
:popcorn:NGHCO and NGHCP are holding strong above par with a high div. It would seem others have caught on to the buyout expected by Allstate, or is there something else a float? I may own too many shares in this, but the corp financials are good and the Allstate deal I have not seen any negative news for months.....
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Happyras, You basically got it right, but no problems. See its trading this way on purpose because it is liquid and market knows its getting redeemed. It just doesnt know when. So it creeps towards par plus accrued divi as it approaches exD. It will top out above that right before exd and then retreat to 25.15-20 again after going ex and repeat the process again until redemption notice sometime next year.
 
So it sounds like a yield slightly under 7.5% until closing. Pretty good.

I hope the Allstate closing is a higher probability that PG&E resuming dividends on their preferreds.
 
Preferred Stock Investing-The Good , The Bad and The In Between

pb4uski said:
So it sounds like a yield slightly under 7.5% until closing. Pretty good.

I hope the Allstate closing is a higher probability that PG&E resuming dividends on their preferreds.
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PB, Allstate has stated it should close early 2021, pending regulatory permissions. Nat Gen isnt a big company so there shouldnt be any anti trust issues. But... It appears BofD is content letting PCG preferreds continue to accrue. So the NG preferreds may be redeemed before PCG preferreds start paying again.
 
I'm working on a paper on preferred stocks. I have a question for the mavens who have participated in this thread.

Do accrued, but unpaid, cumulative dividends result in phantom taxable income? If so, do investors get a deduction if the issuer subsequently kicks the bucket?

Thanks
 
No, I don't think so... to my knowledge dividends are taxable income when received. However all of mine are in tax deferred accounts so I don't have any firsthand experience.

I assume you're aware that for some issues the dividends are qualified and other issues they are not? Again, not something I've paid much attention to since all of my preferreds are in my IRAs.

I'm looking forward to seeing the paper.
 
pb4uski said:
No, I don't think so... to my knowledge dividends are taxable income when received. However all of mine are in tax deferred accounts so I don't have any firsthand experience.

I assume you're aware that for some issues the dividends are qualified and other issues they are not? Again, not something I've paid much attention to since all of my preferreds are in my IRAs.

I'm looking forward to seeing the paper.
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I found several pieces of evidence that suggests that phantom income may be created. Please see:

https://www.latimes.com/archives/la-xpm-2002-apr-07-fi-perfin7-story.html

Google THE DEBEVOISE & PLIMPTON PRIVATE EQUITY REPORT from the summer of 2001. It's a Pdf that I can't link to. It has a nice explanation.

This stuff is old, so I don't knew if it still applies.

I am aware of the qualified dividend treatment.
 
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