Why Not Buy The 7.9%-Yielding Series B Preferred Stock?

These preferred shares are an attractive alternative to the mortgage REIT's common shares. Specifically, I think the Series B fixed-to-floating preferred stocks offers income investors a lot of value in terms of dividend income and principal protection. I discuss advantages and disadvantages of investing in the preferred stock layer. An investment in the Series B preferred stock yields 7.9 percent.

Chimera Investment Corp. (CIM) is a high-yielding mortgage REIT with both common shares and preferred shares outstanding. Investors that don't want to take maximum risk with the mortgage REIT's common shares might want to think about buying Chimera's Series B preferred stock instead. The Series B has a couple of unique features that I will discuss. An investment in Chimera Investment Corp.'s preferred stock layer comes with a flat dividend yield of 7.93 percent.

Source: Seeking Alpha

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