Skip to main content
No. of Recommendations: 1
Last month I posted about buying 500 shares of EAI at $25.40 a share a few days before it's ex-dividend date. After thinking about it more (and liking the idea), I decided to go ahead and buy 500 shares of ELC for the same price of $25.40 a share before the same ex-dividend date. This month I bought EMP & ENO before their ex-dividend date of today. I might be wrong, but right now I like this strategy. The price of these preferreds are being held down due to the chance of being called, so when interest rates rise like they have this week, the price of these preferreds did not fluctuate much. If interest rates keep rising, the likelihood of these preferreds being called becomes less likely.

Time will tell how good of an idea this was...

Jim
Print the post Back To Top
No. of Recommendations: 5
Last month I posted about buying 500 shares of EAI at $25.40 a share a few days before it's ex-dividend date. After thinking about it more (and liking the idea), I decided to go ahead and buy 500 shares of ELC for the same price of $25.40 a share before the same ex-dividend date. This month I bought EMP & ENO before their ex-dividend date of today.

Are you doing this with anything other than Entergy preferreds? I don't disagree with the strategy - as long as you are buying an amount over par that will be covered in 1 or 2 quarters of dividends, it seems like a relatively safe way to get a decent (for now) yield. But you seem to be increasing your single issuer risk.

AJ
Print the post Back To Top
No. of Recommendations: 0
Are you doing this with anything other than Entergy preferreds? I don't disagree with the strategy - as long as you are buying an amount over par that will be covered in 1 or 2 quarters of dividends, it seems like a relatively safe way to get a decent (for now) yield. But you seem to be increasing your single issuer risk.

Hello AJ,

Only Entergy right now, just because they were the only ones that had the criteria that I was looking for (quality credit rating priced where the amount over par would be covered in less than 2 quarters). I do suspect that some or all will be called. If not, I would probably swap one or two of them out for other preferreds when I find something to replace them with.

Jim
Print the post Back To Top
No. of Recommendations: 1
Are you doing this with anything other than Entergy preferreds?

I finally found a couple more preferreds that fit my criteria. I picked up some NEEPRK;

NextEra Energy Capital Holdings, Inc., 5.25% Series K Junior Subordinated Debentures due 2076, issued in $25 denominations, redeemable at the issuer's option on or after 6/1/2021 at $25 per share plus accrued and unpaid interest, and maturing 6/1/2076. Interest distributions of 5.25% per annum ($1.3125 per annum or $0.328125 per quarter) will be paid quarterly on 3/1, 6/1, 9/1 & 12/1 to holders of record on the record date that will be the close of business on the business day immediately prior to the payment date when it remains in book-entry form (NOTE: the ex-dividend date is one business day prior to the record date).

And some FRTPRC;

Federal Realty Investment Trust, 5.00% Depositary shares each representing 1/1000 of Series C Cumulative Redeemable Preferred Share of Beneficial Interest, liquidation preference $25 per depositary share, redeemable at the issuer's option on or after 9/29/2022 at $25 per depositary share plus accrued and unpaid dividends, and with no stated maturity. Cumulative distributions of 5.00% per annum ($1.25 per annum or $0.3125 per quarter) will be paid quarterly on 1/15, 4/15, 7/15 & 10/15 to holders of record on the record date that will be the first day of the calendar month in which the payment date falls or on the record date fixed by the board, not more than 30 days or less than 10 days prior to the payment date (NOTE: the ex-dividend date is one business day prior to the record date).

My IPLDP (have held for a couple years) has recently been called, but that's the only one so far.

Jim
Print the post Back To Top