You guys know I love preferred shares, right? Me likey the cash flow obviously, but I also like the safety they provide. As I said the other day, buying a basket of these things is a great place to put at least a portion of the fixed income part of your portfolio. Lately I’ve been looking at some of the prefs out there and I’m thinking of posting a list of the ones I’d buy if I had unlimited money.
Without further adieu, here are a few of the ones I like. (Note, all info is from the very awesome prefinfo.com)
Both issues of grocer Loblaw’s parent company pay $1.30 annually, working out to a yield of around 6.6%. Each have sold off to below $20, giving investors a nice capital gain if the company decides to redeem these shares. The company can redeem these shares starting later this year, however I don’t think this is very likely in the near future. I view these as a perpetual issue. These issues are pretty much the same, so pick which either one you want.
Disclosure: I own some series d shares, at a slightly lower price. Go me!
Scotiabank series J (bns.pr.j)
Hat tip to Michael James for alerting this to me in the first place. This issue yields slightly over 6%, and can be redeemed in 2013 for par value ($25.00). The issue currently trades for a hair around $21.50, so I say bring on the redemption. There are all sorts of these bank preferreds out there, so take your pick.
Manulife Series B (mfc.pr.b)
Even though the common stock is getting hammered right now, I like the preferreds for the insurance companies. This issue pays $1.16 per share, a yield of 6.25% on today’s closing price of $18.50. Once again, they can be redeemed starting this year for $26.00 and going down in value each year until any time after 2014 when they can be redeemed for $25.00. If they get redeemed, you should do a happy dance and take your capital gain as fast as you can.
I like series c of the bomber preferreds the best because they pay a dividend of $1.56 forever (unless they redeem them) and are yielding a hair over 7%. There is a bit more risk in this name (hence the higher yield) so that’s why you’re getting a bit more than the other prefs we’ve talked about.
Disclosure: I also own a piece of this one, again at lower prices. I am da man!
Nortel Networks (ntl.pr.c)