This 8% Yield Materially Better Than The Other 8% Yielding Preferred Share

This Investment Trust has two preferred shares. One is significantly better than the other at current prices. Investors should be looking to preferred shares for less volatility, higher yields, and relatively less risk. However, these preferred shares do carry material risk and are better suited for trading.

PennyMac Mortgage Investment Trust (PMT) has two preferred shares we will be looking at today: (PMT.PA) and (PMT.PB). When looking at preferred shares, it's important to understand the underlying company. The major reason for this is investors should know how risky their investment is. In the case of PMT preferred shares, I view them as relatively risky. PennyMac is more complicated than most mortgage REITs. The company is trading at a material discount to book value compared to peers across the sector. Even with their rally in 2018, the company is still well below average.

Source: Seeking Alpha

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