Monday, August 18, 2014

Apartment Investment And Management Co. Preferred Stock, Opportunities And Risks

Like the name says, Apartment Investment and Management Company, also known as AIMCO, owns and operates apartment complexes throughout the United States. AIMCO has several initiatives underway to reduce its $4+ billion debt load including the issuance of preferred stock. Using two issues, about $123 million of debt was converted into equity during Q2. The 6.7 percent current yield being offered by AIV-A and AIV-Z is consistent with other B+ rated preferred stocks available in today's preferred stock marketplace.

For preferred stock investors, the cumulative dividends of AIV-A and AIV-Z, along with their competitive current yields, call protection and potential for a rating upgrade will have to be weighed against...

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Monday, July 14, 2014

Preferred Stock Buyers: Time To Change Tactics For Sub-$25 Purchases

Contrary to what we were all told earlier this year, preferred stock market prices have been slowly rising, not falling, since January. As the Fed has withdrawn from its QE program, the market price for the highest quality preferred stocks has gone up about $2 per share this year. A variety of theories have been proposed to explain this reality, but my sense has been, and continues to be, that preferred stock investors have already "priced in" the complete withdrawal of the Fed from their QE bond-buying program.

During a period of increasing prices, preferred stock buyers can purchase newly issued preferred stock shares for sub-$25 prices by...

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Monday, June 23, 2014

American Realty Capital Properties Preferred Stock, Opportunities And Risks

Those considering investing in American Realty Capital Properties, Inc. (ARCP), but who are concerned about its aggressive acquisition strategy and the means of funding it, might find ARCP's preferred stock a better alternative. ARCP is a property REIT and offers a traditional preferred stock that trades on the NGS under the symbol ARCPP. The unrated security's $23 share price is providing a current yield of 7.3 percent.

In June 2012, the company reported that its portfolio included 118 properties. Two years later, the company now reports 3,809 properties in its portfolio, prompting concerns from major shareholders. The company's preferred stock may offer a way of investing in this company while reducing the volatility risk and shareholder turmoil that has come with its aggressive growth strategy.

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Wednesday, May 28, 2014

American Homes 4 Rent Preferred Stocks, Opportunities And Risks

If you believe that single-family homes are likely to appreciate in value over the next several years, American Homes 4 Rent (AMH), organized as a REIT, is a company worth keeping an eye on. AMH is less than one year old, having concluded its initial public offering last August, but its common stock has risen over 10 percent since then. AMH offers investors three preferred stocks - AMH-A, AMH-B and AMH-C - all with cumulative dividends and introduced shortly after the company's August initial public offering.

For each of AMH's preferreds there is a special provision that adds a Home Price Appreciation Factor ("HPA" Factor) to the $25 par value ("initial liquidation preference" amount), hence increasing your dividend income if home values rise..

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Monday, May 12, 2014

Today's Preferred Stock Marketplace; What A Difference A Year Makes

A year ago, preferred stock prices were very high, propped up by the Fed's QE bond-buying program. Common equities soared on cheap money while bond and preferred stock yields dropped to historic lows, even for the highest quality issues. What a difference a year makes.

The highest quality preferred stocks trading on U.S. stock exchanges are now offering an average of 1.9 times the dividend yield as the same company's common stock, almost double the return for income investors.

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Monday, April 21, 2014

Affiliated Managers Group Preferred Stock: Opportunities And Risks

Affiliated Managers Group, Inc. (AMG), an investment management firm, has a $10 billion market cap, with two exchange-traded debt securities (ETDs) currently trading on U.S. stock exchanges. Taking advantage of the low cost of capital available at the time, AMG issued two ETDs, two months apart, in 2012. The most significant difference between the structures of these two ETDs is their call dates.

For risk-averse income investors considering taking a position in Affiliated Managers Group ETDs, the MGR issue consistently offers...

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Monday, April 7, 2014

Goodbye Fed - 2014 Sees Preferred Stock Investors Shed QE Jitter

The number of investment grade preferred stocks selling for a market price below $25 is now at 98, over quadruple the number of choices that were available a year ago. Last year at this time preferred stock investors were faced with extremely high prices, primarily being jacked up by the Fed's QE bond-buying program and fears in Europe that central banks there were going to start grabbing citizens' savings accounts (which they had just done in Cyprus).

But since then, the Fed has started backing out of our market and preferred stock investors are no longer hanging on every word whispered by Fed officials, trying to second-guess what's coming next...

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