Monday, November 25, 2013

Aegon, N.V. Preferred Stocks: Opportunities And Risks

Posted by Doug K. Le Du, Author of Preferred Stock Investing at 2:56 PM
AEGON, N.V. (AEG), a Dutch insurance company with a $17.78 billion market cap, has six preferred stocks currently trading including one exchange-traded debt security (ETDs). These six securities, five of which are fixed-rate with one floating rate preferred, have double investment grade ratings (Baa1/BBB). The fixed-rate securities are offering an average current yield of 6.93 percent. The floater is a LIBOR-based floating-rate traditional preferred stock and is currently paying 4 percent.

AEV offers a competitive 6.875 percent dividend and is trading below its $25 par value. And even though it is redeemable, a call seems unlikely since one of AEGON's other preferreds -- AEF -- has a 7.25 percent coupon on 40m outstanding shares and is costing the company much more in dividend expense...

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