New 6.0% Preferred Shares Look Like A Good Deal

Income investors don't always have to buy common shares. Preferred shares can also make attractive value propositions as income vehicles because they have unique risk and return characteristics. Preferred shares - as a rule of thumb - tend to be less risky (read, less volatile) than common shares due to their higher ranking in the capital structure. This company has a new preferred stock outstanding. The Series A is an attractive alternative to the common shares for investors that worry about volatility. An investment in the preferred stock layer yields more than 6.0 percent.

Spirit Realty Capital (SRC) is a higher risk commercial real estate investment trust that made some headlines in the past due to its exposure to its largest tenant ShopKo. While the common shares are situated at the higher end of the risk spectrum, I think the REIT's new preferred shares are an attractive alternative for income investors that want a decent yield choice and lower their risk.

Source: Seeking Alpha

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