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

[pb4uski]

For my preferreds I try to stay with investment grade credits.

 

[Hamster]

Sad to see this long running and, for many, profitable thread apparently run out of steam. It has been both highly educational and entertaining.

 

[aja8888]

Sad to see this long running and, for many, profitable thread apparently run out of steam. It has been both highly educational and entertaining.

The chase for yield moved to CDs and TBills!

 

[Hamster]

Isn't that a chase for safety, rather than yield? Lots of solid preferreds out there several percent higher than treasuries or CDs, plus selling below par.

 

[aja8888]

Isn't that a chase for safety, rather than yield? Lots of solid preferreds out there several percent higher than treasuries or CDs, plus selling below par.

I have several preferred that a long term holds. You do have to be choosy to pick safe ones. Agreed, you can get screwed if you are not careful.

 

[tizod]

I have been amazed at how this slowed down (Grid??). True the investment cycle flipped but with current dynamics, seems appropriate to be talking here. I vote HROWL&M and GTLS based on recent drop but solid backlog. Think both outperform other fixed and most stock thru maturity. In our current dynamics. And ATHS - about 7.1% right now.

 

[Winemaker]

Sad to see this long running and, for many, profitable thread apparently run out of steam. It has been both highly educational and entertaining.

I'm still holding all of my issues and buying on slumps. After initially limiting my self to $5k in each issue, I have gone up to$15k in some. I have about $40k in BAC-L bought at about $1100 each, but I also hold a bunch of BAC common bought about $5 in 2008-9. If it ever gets called at ~$1300, the commons have to be $65, IIRC.

 

[pb4uski]

I still have ~30% in preferred. A couple of my favorites are ALL/PRB and C/PRN

It is just that I don't do a lot of trading these days so I don't have much to post here.

 

[copyright1997reloaded]

Over the last six months, I haven't bought ANY equities - except for Gold/Silver miners and some JPM PRM preferred. Sold some Apple as it represented (and still represents) my largest single holding.

(I'm now thinking of nibbling on a few things. Added a bit to MRVL after its STEEP drop post-good-but-not-good-enough earnings. Might nibble a couple things on todays upcoming market close.)

 

[Texas Proud]

I still have ~30% in preferred. A couple of my favorites are ALL/PRB and C/PRN

It is just that I don't do a lot of trading these days so I don't have much to post here.

Two of my 3 biggest ones.... the other is CUBI... largest pref...

I hated losing NSS... am starting to look for something else as I sold a big chunk of MF to fill up my cash bucket...

 

[youbet]

I still have ~30% in preferred. A couple of my favorites are ALL/PRB and C/PRN

It is just that I don't do a lot of trading these days so I don't have much to post here.

I added to some positions recently but not really very active with preferreds lately either.

A question for ya, or anyone, most of my preferreds are in my regular brokerage account so the divs are not tax deferred. Therefore I limit myself to preferreds that pay qualified divs to take advantage of the 15% / 20% tax rate which is below my marginal rate. Is that what most folks do?

A preferred paying a qualified 6% div taxed at 15% is quite nice compared to a CD or treasury paying 4.5% and taxed as ordinary income. Of course, there is the risk component to consider..............

 

[pb4uski]

While I track tax status in my inventory of preferred, I don't focus on it much. Since I manage income to the top of the 0% preferences income bracket, it's 0%. Whether the non-prefetenced deferred dividends are 0%, 10% or 12% depends on where one places them in order.

 

[Texas Proud]

I have all but one in a ROTH or regular IRA.. well, truth is that the one is really a bond...

 

[brokrken]

I have all in IRAs, so don't worry about taxes. Current roster is COF-K, FLG-U (formerly NYCB-U), HWM-P, JPM-M, MS-F, QVCGP (formerly QRTEP), RILYZ, SLMNP, SR-A, WAFDP, TBB, and unfortunately OTRKP (luckily only had $5k in this one). I have between $20-$30K in most, some a little more, some a little less

 

[Hamster]

An interesting list. Thanks for sharing it.

I can understand most of these, but QVCGP and RILYZ seem different. I haven't looked at either in detail, but personally I don't buy anything with a yield that high. Probably missing some return, but I just assume it means the risk is high.

 

[tizod]

Both could be close to BK. Qrate debt is complex - easy to argue many ways, but either way stock default could be locical for them to restructure (I doubt they would go away totally, but BK to remove debt). RILY same issues, but maybe getting more hopeful. But they have big issues and BK might be in the caards for them to strip away debt and bad assets and emerge "better off" especially if something happens to Bryant. I'd avoid unless you consider these purchases like a March Madness poll....

 

[Winemaker]

The Qrate is a complex situation; also in which John Malone is a major holder and an insider. Still, tread easy.. I do have some in my speculative account.

 

[brokrken]

On RILYZ, I owned the last issue for years with the same ticker that either matured or got called, I can't remember. So, i just bought back in. Qrate for sure was a flyer and only have $5k in it, but they keep paying

 

[pb4uski]

^^^ currently priced ~$9/share and yielding 13.5%... a little too risky for me, but interesting if I cared to spend a lot of time evaluating their creditworthiness.

 

[Texas Proud]

Just saw this in my email... from Fidelity...

The MicroStrategy Incorporated d/b/a Strategy perpetual strife preferred stock offering is available to all brokerage clients with $10,000 or more in retail brokerage assets. The offering is a $100 stated amount perpetual preferred stock with a 10% dividend per annum that is non-rated (NR/NR).

 

[Texas Proud]

^^^ currently priced ~$9/share and yielding 13.5%... a little too risky for me, but interesting if I cared to spend a lot of time evaluating their creditworthiness.

Yea... the company lost 94% of its value in 3 years... it is one that I would sell if I had owned it...

 

[Tacitus]

New here but long term preferred investor. Curious as to criteria may use in selecting aside from yield and yield to worst. I look at the common stock, if there is one, dividend history, financials of the company, eps. dividend payout ratio, revenue, and market price hx of the preferred and the common stock at minimum. Do others have criteria or recommendations?
Guess should offer a recent buy AGM-E. Over 6% and also qualifies for the 15% tax rate per Quantum. Anyhow, will be nice to bounce thoughts with others on this. One item why I heavily weigh dividend history of the common, is that I believe if the common pays a dividend the preferred by statute must pay it distribution.

 

[pb4uski]

I have over 50 preferreds right now that are about 30% of my total stash. With a couple exceptions, limit myself to no more than 0.5% of total portfolio value in any one credit. I look at current yield and S&P/Moody's ratings (which as I suspect that you know tend to be one or two notches lower than the issuers debt ratings). I generally don't buy callables unless they trade at a discount or a small premium of only 1 or 2 dividend payments. I generally only by issuers whose debt is investment grade.

My favorites are ALL/PRB and C/PRN since the have a very attractive risk/return ratio IMO. I read somewhere that C/PRN is unlikely to be called because of the tax implications to C.

 

[aja8888]

New here but long term preferred investor. Curious as to criteria may use in selecting aside from yield and yield to worst. I look at the common stock, if there is one, dividend history, financials of the company, eps. dividend payout ratio, revenue, and market price hx of the preferred and the common stock at minimum. Do others have criteria or recommendations?
Guess should offer a recent buy AGM-E. Over 6% and also qualifies for the 15% tax rate per Quantum. Anyhow, will be nice to bounce thoughts with others on this. One item why I heavily weigh dividend history of the common, is that I believe if the common pays a dividend the preferred by statute must pay it distribution.

I like to buy cumulative payment issues only.

 

[Tacitus]

Many financial preferred maybe most are for whatever reasons non cumulative. And noted many financial preferreds eligible the the 15% reduced tax rate.