3 New High-Yield Preferred Stock Issuances

Readers of my column know that I am very high on preferred stock. Once thought of as an exotic security, preferred stock has become a go-to for income investors in an era where bond yields fell to near-zero. The beauty of preferred stock is that it is a substantially higher-yield security than bonds, and that will likely remain the case for some time to come. The other great thing about preferred stock is that while it is theoretically riskier than bonds, the true risk is roughly equal to bonds.

Here are three new preferred stock issuances on companies that I consider very solvent: On May 10, Sunstone Hotel Investors Inc (SHO) issued a Series F 6.45% cumulative preferred stock at $25 par value. Dividend Yield: 6.45%; Bank of America Corp (BAC) has a long history of issuing preferred stock. It put out a $900 million offering of a 6% non-cumulative preferred, Series EE on April 18. Dividend Yield: 6%; and Goldman Sachs Group Inc (GS) is a name that still engenders a lot of anger among Americans, yet there’s no denying it remains a premier — and solvent — investment bank. Dividend Yield: 6.3%

Source: InvestorPlace

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