Preferred Stocks – Banks and Insurance Issues

By: ,

This page is specific to preferred stocks of banks and insurance companies.

Banks and Insurance companies ALMOST always pay qualified dividends (tax advantaged).  On the other hand they are no longer allowed to issue cumulative or it will not be counted as Tier 1 equity.

From this page you can start your research on Preferred Stocks. With current prices and yields you should be able to select a few that appear to meet your yield requirements and risk profile.


How do You Buy Preferred Stocks?

You buy Preferreds just like you would any stock.  Put in an order in your brokerage account and wait.  The prime difference with preferred stocks is most trade very ‘thin’ (little volume) so you should always use ‘limit’ orders or you may pay way more than is necessary for your shares.

Yield to Call Assumptions

The Yield to Call numbers shown should be viewed as approximate.  If the issue is trading below par the YTC is always positive, if the issue is trading above par the YTC is always negative when past the 1st call date.  This is because the assumption is that a callable issue (past the 1st call date) will be called the next available day (tomorrow).  This is because we have no way to know when/if actual call day may arrive.  Additionally our formula does NOT pick up accrued dividends at this point in time so the YTC shown is off by 0 to 1.5%.  For issues past their first call date this also represents Yield to Worst (YTW)

If the issue is not past the first possible call date the YTC shown should be very close to correct and can be considered YTW also.

To get more information on preferred stocks, screen them, set up your own portfolio and receive email alerts, go to now.


Related Posts:

Tim McPartland

Connect with Tim McPartland

Tim McPartland
Tim McPartland is a private investor with over 45 years of investing experience. His analysis, research and writing is devoted to the hunt for income producing securities of all types, but in particular specializing in preferred stocks, exchange traded debt and Master Limited Partnerships.
Search Dividend Investor