Tag - preferred stock

Advice to the Advisors

Sheaff Brock Institutional Group | "cheat sheet" on Preferred Stock

Preferred Stock 301+

(As an advisor, you’re in the know, but perhaps your clients can use a 101+ quick “cheat sheet” on Preferred Stock). Then, keep reading for some more advanced insights … By issuing preferred stock, a company combines the characteristics of both debt and equity. Advantages to the issuing company include: Issuing preferred stock as opposed to bonds keeps the company’s debt-to-equity ratio lower, a situation favored by investors. Ratings agencies tend to give a more favorable analysis for preferreds as [...]

Advice to the Advisors

Preferred Stock as Portfolio Ballast | Sheaff Brock Institutional

Preferred Stock as Portfolio Ballast

“Corporate bonds and preferred stocks are two of the most common ways for a company to raise capital,” Ravi Srikant writes in Investopedia, and income-seeking investors, he says, can make good use of both. While bonds make regular interest payments, preferreds pay fixed dividends, Srikant explains, going on to note three qualities the two investment types share: Interest rate sensitivity—the security’s price falls when interest rates rise. Callability—the issuer has the right to call back the security and issue [...]