If you like to earn high income on your investments, and you are frustrated with artificially low interest rates (thanks to the Fed’s meddling), you might consider preferred stocks. They offer compelling high yields, and less volatility risk than many other high yield opportunities. And while price appreciation is not usually the primary goal of preferred stock investors (income is), some of preferred stocks can offer attractive price appreciation potential, if you select them right. This week’s Blue Harbinger Weekly shares our top high yield preferred stocks (we currently own 6 of the top 7). Without further ado, here is the full (members-only) list.
7. Seaspan (SSW-I), Yield: 7.7%
If it’s steady high-income you’re looking for, Seaspan’s series I preferred shares (SSW.PI) are worth considering. You shouldn’t expect any price appreciation for these shares (they’ll continue to hover right around $25), but the big quarterly dividend payments are supported by a strong growing business (Seaspan’s fleet has grown dramatically while simultaneously increasing operational efficiency), strong financials (access to cash on favorable terms) and favorable industry dynamics (demand for Seaspan’s differentiated fleet). Further, the 7.7% dividend yield will go a lot farther than most other income investments, and it’ll do so with considerably less volatility risk and stress. You can access our full Seaspan report, here…
6. Tsakos Energy Navigation (TNP-E), Yield: 10.7%
Tsakos Energy Navigation Limited (TNP) is a leading provider of seaborne transportation services to the crude oil and petroleum products industry. In this article (link below), we analyze its business model, dividend potential, growth prospects and finally conclude with our opinion on the company’s attractive preferred shares in terms of risks versus rewards.
5. Teekay LNG Partners (TGP-B), Yield: 8.5%
We have owned Teekay LNG Partners preferred shares since April of 2018 (when they were trading at a lower price of around $23 per share (they currently hover around $25). And as we wrote in our full report on TGP-B at that time, we wrote: “If you like high yield, low volatility, discounted prices, reduced interest rate risk, and improving businesses, then these fixed-to-floating rate preferred units are worth considering for a spot in your diversified income-focused investment portfolio.” The price isn’t still discounted (again, it hovers around $25), but the business is strong, and the yield is nice. You can read our earlier full report here…
4a. Nuveen Preferred Income Fund (JPS), Yield: 6.8%
4b. Nuveen Preferred & Income Term (JPI), Yield: 6.6%
If the thought of holding single position preferred stocks frightens you, you can reduce the “stock specific risk” and keep you’re overall yield fairly high, by investing in a portfolio of preferred stocks through a Closed-End Fund (“CEF”), and in this case we are sharing two (we own them both). The yields are actually just under 7% on each, but they’re still attractive, and we’re sharing them both (a “two-for-one”) to try to appease anyone upside with the title of this article on a technicality (hey, they round up to 7%, if you round up to the neared whole percent number). And what we like about these preferred stock CEFs (besides the high yields and instant diversification, is that they both trade at attrative discounts to their net asset values (an attractive quality of many CEFs). you can read our full write-up on this opportunity, here…
3. Teekay Offshore (TOO-B), Yield: 10.8%
This is one of the higher risk names on our list, but we continue to own it. We wrote about this one in detail a little over a week ago, but since that time the share price has risen sharply following the latest dividend payment announcement from the company (some investors were afraid). However, it still trades at a significant discount to it’s redemption price ($25/share). We continue to own these shares, and you can read our recent full report here…
2. Triton International (TRTN-A), Yield: 8.0%
We picked up these preferred shares of this intermodal shipping company at a nice discount earlier this year. And even though the shares have risen to above $25 since that time, we continue to view them as very attractive because of the big dividend yield which is relatively very safe, in our view. The company has also recently issue series B preferred shares, which are also attractive. You can read our full report on Triton series A preferred shares, here…
1. NuStar Energy (NS-C), Yield: 9.1%
NuStar is nearing the end of a very large strategic capital expenditure program, and on a trajectory for very strong EBITDA growth. And its preferred shares offers attractive, strong, stable income thanks to the company’s MLP structure. If you’re an income-focused investor, this one (NS-C) is absolutely worth considering for a spot in your prudently diversified long-term portfolio. You can view our full write-up on NuStar series C preferred shares here…
Note: We are currently long shares of NuStar series C preferred shares. To view all of our current holdings, please click here.