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Uncommon Big-Cap Preferred Shares
A common investment quandary: you spy out a company (or several) that have solid operations and management with common stock that offers a reasonable dividend yield, but you're unsure about your timing. Will the shares will be good holdings from a capital gains perspective? Will they drop precipitously directly after you purchase? Sure, you have the yield cushion, but can you handle the battering to your portfolio that a 15% or 20% drop in price will engender?
In some cases, it may be a better solution to see if those same companies offer preferred shares. The preferreds will likely outperform the common on a yield basis, and they'll also be less subject to the wild philanderings of common shares in general. Below, we highlight several large-cap, household stocks with preferred shares that offer great yields.
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The Stability of an Established Utility
FPL Group Inc. (NYSE:FPL) possesses one of the largest and most diverse array of energy holdings in theUnited States Canada
FPL's Series F preferred stock (NYSE:FPL-F) is actually a junior subordinated debenture divided into $25 'shares' that currently pay 7.7% annually. Stability is all but guaranteed here, too: in this last, tumultuous year the shares have fluctuated between $25-29.
The preferreds are rated A3 by Moody's and BBB+ by S&P.
One of the Earliest Dow Components
General Electric Corp. (NYSE:GE) was added to the Dow Jones Industrial Index in 1907, making it the longest running component currently on the index - and one of the largest. GE has a market cap of $155 billion and its preferred shares, 'G' Series, (NYSE:GEG) now offer investors a healthy 6.5% return.
The shares have not been immune, however, to the vicissitudes of this year's market. They bottomed at a 52-week low back in March when questions regarding the viability of GE's finance arm roiled the stock. Since then, the preferreds have appreciated by roughly 90% as it came clear that the threat was far less than first apprehended.
GEG shares are rated Aa2 by Moody's and AA+ by S&P.
Comcast Corp. (NYSE:CCW) 7.00% Series B Notes are currently yielding 7% and are rated a healthy Baa1 by Moody's and BBB+ by S&P (these, too, are notes which trade like preferred shares).
Comcast is a $50 billion company that provides cable services to more than 50 million homes acrossAmerica
The Wrap
For income seekers who want the stability of investing in a big company but aren't sure when to do it, preferred shares are a reasonable option. The three companies profiled above offer great yields and less volatility than their respective common stocks. (To learn more, see A Primer On Preferred Stocks.)
Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!
In some cases, it may be a better solution to see if those same companies offer preferred shares. The preferreds will likely outperform the common on a yield basis, and they'll also be less subject to the wild philanderings of common shares in general. Below, we highlight several large-cap, household stocks with preferred shares that offer great yields.
IN PICTURES: 20 Tools For Building Up Your Portfolio
The Stability of an Established Utility
FPL Group Inc. (NYSE:FPL) possesses one of the largest and most diverse array of energy holdings in the
FPL's Series F preferred stock (NYSE:FPL-F) is actually a junior subordinated debenture divided into $25 'shares' that currently pay 7.7% annually. Stability is all but guaranteed here, too: in this last, tumultuous year the shares have fluctuated between $25-29.
The preferreds are rated A3 by Moody's and BBB+ by S&P.
General Electric Corp. (NYSE:GE) was added to the Dow Jones Industrial Index in 1907, making it the longest running component currently on the index - and one of the largest. GE has a market cap of $155 billion and its preferred shares, 'G' Series, (NYSE:GEG) now offer investors a healthy 6.5% return.
The shares have not been immune, however, to the vicissitudes of this year's market. They bottomed at a 52-week low back in March when questions regarding the viability of GE's finance arm roiled the stock. Since then, the preferreds have appreciated by roughly 90% as it came clear that the threat was far less than first apprehended.
GEG shares are rated Aa2 by Moody's and AA+ by S&P.
Comcast Corp. (NYSE:CCW) 7.00% Series B Notes are currently yielding 7% and are rated a healthy Baa1 by Moody's and BBB+ by S&P (these, too, are notes which trade like preferred shares).
Comcast is a $50 billion company that provides cable services to more than 50 million homes across
The Wrap
For income seekers who want the stability of investing in a big company but aren't sure when to do it, preferred shares are a reasonable option. The three companies profiled above offer great yields and less volatility than their respective common stocks. (To learn more, see A Primer On Preferred Stocks.)
Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!
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