Several Preferred Shares I’m Looking At

May 6th, 2010 by Nelson Smith

If you're new here, you may want to subscribe to get stock tips or have investing ideas delivered to your email. I'm also on The Twitter.Thanks for visiting!

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)

George Weston (wn.pr.c or wn.pr.d)

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.

Bombardier (bbd.pr.c)

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)

Just kidding.