Investors looking for safety and a decent yield have been enjoying Bank of America's (NYSE:BAC) Series I Preferred stock, which is now yielding 7 percent.
Preferred stock offers more stability to investors because of the guaranteed dividend which a company normally ties into cash and earning, rather than on future cash flow. Dividends in common stock isn't guaranteed, although long-term, successful companies can usually be counted on to pay out at level or growing increments.
At the same time the upside to preferred stock is limited in contrast to common shares, but again, the point is stability and more safety rather than growth.
The 52-week range of Bank of America Series I Preferred is $19.43 to $24.55. Keep in mind there has been heavier trading lately on them.
Bank of America closed Friday at $14.75, dropping $0.06, or 0.41 percent.
Showing posts with label Preferred Shares. Show all posts
Showing posts with label Preferred Shares. Show all posts
Tuesday, February 22, 2011
Tuesday, February 15, 2011
Ford's (NYSE:F) Convertible Preferred Stock Shares Called
Shares of Ford (NYSE:F) convertible preferred stock have been called, and as of March 15, the automaker will redeem the share at close to $50.87 each.
This is reference to convertible preferreds, meaning shareholders are given the option of converting each preferred share into 2.8769 shares of Ford’s common stock.
Working from Friday's close of $16.38, that would value the shares at about $47.12. In contrast, the preferreds closed Friday at $51.03.
The bottom line for income investors is the conversion to common shares of Ford does little, and so they'll have to go somewhere else to get their quarterly dividend payout they have been enjoying from Ford.
Based on a par value of $50, the shares had been yielding 6.5 percent.
Ford was trading at $16.08, down $0.01, or 0.09 percent, as of 1:18 PM EST.
This is reference to convertible preferreds, meaning shareholders are given the option of converting each preferred share into 2.8769 shares of Ford’s common stock.
Working from Friday's close of $16.38, that would value the shares at about $47.12. In contrast, the preferreds closed Friday at $51.03.
The bottom line for income investors is the conversion to common shares of Ford does little, and so they'll have to go somewhere else to get their quarterly dividend payout they have been enjoying from Ford.
Based on a par value of $50, the shares had been yielding 6.5 percent.
Ford was trading at $16.08, down $0.01, or 0.09 percent, as of 1:18 PM EST.
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