 One of the highest reader-rated books in the United States.
See the new Fifth Edition of Preferred Stock Investing at Amazon! |
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“Doug's thesis is grounded in data, it's easy to understand and execute, and it gets results. The risk/reward ratio is superior to most other investment strategies." Christian D., CDx3 Notification Service subscriber MORE>> |
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For New Readers... Welcome to all of the new CDx3 Newsletter readers who signed up over the last month. This is your first issue of the CDx3 Newsletter, a free monthly newsletter devoted to the interests of CDx3 Preferred Stock investors. To be sure that you continue to receive the CDx3 Newsletter each month, please remember to add the following email address to your email address book safe sender list: CDx3NotificationService@us.emaildirect.com.
This month's High Quality Preferred Stocks article describes how the market for the highest quality preferred stocks now favors buyers. Of the twenty-two high quality preferred stocks selling for a sub-$25 market price, five offer a dividend of at least 7 percent. Out of the 932 preferred stocks and exchange-traded debt securities that were trading on U.S. stock exchanges at the end of November 2013, our preferred stock search engine found 22 specific high quality issues selling below their $25 par value. (jump to article) The Preferred Stock News article explores how preferred stock investors can capture 90 days' worth of dividend income while only having their cash invested for a few days. Seven specific examples of high quality preferred stocks are identified that are not only December dividend payers but are also currently trading below their $25 par values. (jump to article) The Special Announcement article announces the availability of the all new 5th Edition of my book, Preferred Stock Investing. The new Fifth Edition of Preferred Stock Investing started shipping this summer. I update the book every other year with the most recent preferred stock research, focusing on the conditions that preferred stock investors are expected to be facing (upward pressure on rates). Learn to screen, buy and sell the highest quality preferred stocks. (jump to article) The Preferred Stock Facts article is presented both here and on the PreferredStockInvesting.com website. Test your knowledge by clicking on any preferred stock question to see the multiple-choice answers. You will receive an automatic email that provides you with the correct answer and my explanation. (jump to article) The Free Special Offer article explains how you can now have continuing preferred stock research delivered to you for free. Why wait until next month's CDx3 Newsletter to find out what is going on in the preferred stock marketplace? Throughout the month I post regular research articles on my blog and make them available to you for free. (jump to article) Enjoy this month's issue. I look forward to reporting back to you in next month's issue of the CDx3 Newsletter. |
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22 Investment Grade, 6.5+ Percent Cumulative Preferreds Available Under $25 Preferred stock search engine finds these 22 out of 932 alternatives With a sub-$25 average price, the market for the highest quality preferred stocks now favors buyers. Of the twenty-two high quality preferred stocks selling for a sub-$25 market price, five offer a dividend of at least 7 percent. As rates and prices move up and down over time, buyers buy when rates increase and prices fall below par ($25 per share in this case). Sellers sell those shares when rates fall again, pushing prices back above their original purchase price, enjoying 7 percent (long-term average) dividends in the meantime. This is why preferred stock investing is long-term investing, taking advantage of the known inverse relationship between rates and prices over time. I define 'high quality' here as securities that are able to meet all ten of the CDx3 Selection Criteria from my book, Preferred Stock Investing. The search engine parameters seen in Figure 1 look for preferred stocks and exchange-traded debt securities (ETDs) that are currently trading below their $25 par value, pay a minimum annual dividend of at least 6.5 percent, have cumulative dividends and offer investment grade ratings from Moody's Investors Service. Purchasing shares below $25 is an important consideration for many preferred stock investors. In the event that your shares are redeemed (bought back from you) by the issuing company, shareholders will receive the security's par value in cash in exchange for their shares. By purchasing shares below their par value ($25 in most cases and in all of the cases shown here), preferred stock investors are able to add a layer of principal protection to their investment while also positioning themselves for a downstream capital gain in the event of a future call. Figure 1 shows the complete filter used to find these gems. Of the nineteen parameters that can be set, the four arrows highlight the keys for this search. Setting the "Currently priced below par" parameter to "Yes" does the magic here. In addition to finding the highest quality issues that are currently trading below their $25 par value, this filter also limits the list to issues that have not suspended their dividend payments. Setting the "Dividend rate at least" parameter (center left under the Dividends heading) to 6.500 eliminates securities with very low, variable or adjustable dividend rates. And by setting "Today's price, at least" to $0.01 and "Today's volume, at least" to 1 share the filter will exclude less liquid issues (securities that have not traded today). This is just one example. Click on the filter image to see another one along with a more detailed explanation. Figure 2 shows the results when this search is applied to our Preferred Stock ListTM database (please note that to protect the values of subscriptions to the CDx3 Notification Service, trading symbols are obscured here). Already a CDx3 Notification Service subscriber? See page 6 of the December 2013 issue of the subscriber's newsletter, CDx3 Research Notes, that you received on November 30 for symbols. There were a total of 932 preferred stocks and ETDs trading on U.S. stock exchanges as November 2013 came to a close. Of these 932, 22 specific high quality issues are trading below their $25 par value (November 27, 2013 prices). This list is sorted by dividend rate (coupon) with the highest payers listed first. The eight securities shown in green font are ETDs (bonds that trade on the stock exchange rather than the bond market and are very similar to preferred socks) while the remaining 14 securities listed are preferred stocks. All have a current market price (seen in the Last Price column) that is below their $25 par value (as shown in the Liquid Price column) and enjoy an investment grade rating from Moody's (the Moody's column). Keep an eye out for sub-$25 buying opportunities such as those listed here. The lower your purchase price, the more principal protection you'll have. The preferred stocks and ETDs listed in Figure 2 are offering some of the best choices available to you as an income investor. Please consider becoming a subscriber to the CDx3 Notification Service today. Already a subscriber? The trading symbols for this example are provided on page 6 of the December 2013 issue of the subscriber's newsletter, CDx3 Research Notes.
Learn To Screen, Buy and Sell The Highest Quality Preferred Stocks
Preferred Stock Investing is one of the highest reader-rated books in the United States with 69 reviews posted at Amazon. A new edition of Preferred Stock Investing is published every other year in order to keep up with current market trends and research. The new Fifth Edition addresses selecting, buying and selling the highest quality preferred stocks during the market conditions that we are expected to face throughout 2014 (upward pressure on rates). See: Reviews | Table of Contents | Free Excerpt | Paperback | eBook Preferred Stock Investing includes the information, websites and other resources needed for you to be a very successful preferred stock investor. The Fifth Edition is now available at your favorite online retailer. For those who would rather someone else do the research and calculations, I offer the CDx3 Notification Service. Subscribers to the CDx3 Notification Service receive an email alert whenever a new preferred stock or exchange-traded debt security is introduced. Subscribers also receive their own non-promotional preferred stock research newsletter every month, have their own website that hosts the Preferred Stock ListTM database and have access to the CDx3 Discussion Group, the only online forum just for preferred stock investors. Invest in the best. Subscribe to the CDx3 Notification Service today. |
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Quick Money: High Quality Preferred Stocks Paying December Dividends Seven ways to earn 90 days of income in less than 30 days During December, several hundred preferred stocks trading on U.S. stock exchanges are going to pay their dividend to shareholders including the seven high quality examples listed here. Most preferred stocks pay dividends each quarter. And whoever owns the shares on the security’s ex-dividend date is going to receive the entire quarter’s worth of dividend income, regardless of how many days during the quarter you actually owned the shares. Even if you only own the shares for a few hours, you are going to receive 90 days’ worth of dividend income as long as you own the shares when the market opens on the security’s "ex-dividend date." Obviously, knowing which preferreds are about to reach their next ex-dividend becomes important to buyers looking for a quick dividend. Distribution of quarterly payers While most preferred stocks pay dividends on a quarterly schedule, the schedule varies; some pay in January, April, July and October while others pay in February, May, August and November. But most (56%) pay their dividends using the calendar quarter -- March, June, September and December. Figure 3 shows the current dividend distribution used by U.S.-traded quarterly payers. Since the payment schedule of quarterly payers varies, a robust preferred stock portfolio generates income every month. High quality December 2013 payers There are currently 932 preferred stocks and Exchange-Traded Debt Securities (ETDs) trading on U.S. stock exchanges. ETDs are very similar to, and are often listed as, preferred stocks but are actually bonds that trade on the stock exchange (rather than the bond market). Before the availability of online preferred stock databases and search engines, finding out which ones (a) had the high quality characteristics favored by risk-averse preferred stock investors and (b) are about to reach their ex-dividend date took so long that the opportunity would come and go before the specific candidates could be nailed down. Fortunately for today’s preferred stock investors, that is no longer the case. Using an online database and preferred stock search engine (the CDx3 Notification Service database is used here), finding high quality issues that are within days of providing their shareholders with 90 days’ worth of dividend income now takes just a few seconds. High quality is defined here as those securities having an investment grade rating from Moody’s, cumulative dividends (meaning that if the issuing company missed a dividend payment they have to make it up to you; their obligation accumulates), are currently call-protected, are trading below these security’s $25 par value (positioning you for a capital gain in the event of a downstream call) and offer a dividend rate (coupon) of at least 6.5% (making a downstream call more likely than with lower payers). Figure 4 lists seven examples of U.S.-traded high quality preferred stocks that have (or are expected to have) an ex-dividend date in December 2013. CDx3 Notification Service subscribers can see the entire list of 18 high quality December payers by using the Create Your Own Filter feature seen in Figure 2 above. Just set the "Schedule (ex-dividend month)" parameter to "December." Those who own shares of any of these high quality December payers on the indicated ex-dividend date will receive the upcoming quarterly dividend payment from the issuing company. Quarterly payment amount How much is the payment going to be? Here’s the formula: ($25 times [dividend rate]) divided by 4. The [dividend rate] value is the percentage that you see in the “Div Rate” column in Figure 4. For example, DLR-E is issued by Digital Realty Trust, Inc. (NYSE: DLR) and pays a 7.0% annual dividend. The dividend that preferred stock shareholders receive is always based on the security’s “par” value – not your purchase price and not the current market price. The par value for each of the seven examples shown here is $25 per share so DLR-E pays an annual dividend of $1.75 per share ($25 times 7%). Dividing this annual amount by four gives us the quarterly dividend payment of $0.44 per share to those holding shares on the morning of DLR-E’s December 11, 2013 ex-dividend date. What's next? If the characteristics of these securities are consistent with your goals, resources and risk tolerance, you can make 90 days’ worth of dividend income after having invested for only a few days during December. Just remember that you must own the shares prior to the security’s December ex-dividend date and you’ll be in the chips going into the new year.
More Preferred Stock Research FROM DOUG K. LE DU Click any headline
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Fifth Edition of Preferred Stock Investing is Now Shipping! Learn how to screen, buy and sell the highest quality preferred stocks
A new edition of Preferred Stock Investing is published every other year in order to keep up with current market trends and research. The new Fifth Edition addresses selecting, buying and selling the highest quality preferred stocks during the market conditions that we are expected to face throughout 2014 (upward pressure on rates). See: Reviews | Table of Contents | Free Excerpt | Paperback | eBook The preferred stock market is finally starting to return to a market favoring buyers - higher dividend income available for lower prices. The new Fifth Edition has 21 chapters organized into six Parts over 334 pages. Here are some highlights: - Part I, "The Preferred Stock Market," introduces a new suite of charts and metrics specifically designed to measure and track the preferred stock marketplace. - Part III, "Buying the Highest Quality Preferred Stocks," includes several new chapters such as "Buying 'Fed-Free' Preferred Stocks," "Keeping Up with Increasing Interest Rates" and "Buying Less-Than-Perfect Preferred Stocks." - And chapter 8, "Managing the Risks," has been completely rewritten and expanded to include risks that are unique to preferred stocks during the increasing rate environment that awaits us. You can pick up a copy of the new Fifth Edition of Preferred Stock Investing at your favorite online retailer such as Amazon (paperback) or directly from BookLocker, the book's publisher (BookLocker provides paperback and PDF eBook formats). |
Chapter 17 provides the investing results for every qualifying preferred stock issued since January 2001 |
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Test Your Knowledge With These Preferred Stock Facts!
Clicking on any of the below questions will open a new window on your screen. Each question is presented with multiple-choice answers. Test your knowledge by submitting your best guess and I will automatically email you my analysis with the correct answer (and no spam, ever).
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 Preferred Stock Market Research Now Available All Month Long - Free Automatic Email delivery of preferred stock market research now available Readers do not have to wait until next month's issue of the CDx3 Newsletter to stay plugged into the market for high quality preferred stocks. Preferred stock research articles, marketplace observations and preferred stock news from the financial press and other information are posted to the Preferred Stock Investing Reader's Forum (my "blog") throughout the month. To receive articles by email automatically without having to visit the Forum, click here A separate window from FeedBurner (a Google service) will open on your screen. Enter and verify the email address that you want articles from the Forum to be emailed to as instructed. And don't worry - you'll never receive any spam from me and your email address will not be shared. By receiving the articles as I post them via email, you do not have to visit the Forum in order to stay plugged into my research regarding the marketplace for the highest quality preferred stocks. Please accept my invitation to receive articles by email and visit the Forum. |
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Chapter
17 of Preferred Stock Investing
includes a list of all of the CDx3
Preferred Stocks issued since January
2001 and the investing results you
would have achieved had you invested in
them using the CDx3 Income Engine.
Please
take a look at
www.PreferredStockInvesting.com.
And if you
know
someone who might be interested in simple
investing
for non-experts please have them
sign up for this free monthly preferred
stock research newsletter
at
www.PreferredStockInvesting.com.
They will automatically
begin receiving this monthly CDx3
Newsletter
next month (plus a
CDx3 Special Report) - all FREE. Many Happy Returns, Doug K. Le Du |
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Copyright (c) 2013 by Del Mar Research, LLC. Preferred Stock List, CD Times 3, CDx3, CDx3 Income Engine, CDx3 Investor, CDx3 Portfolio, CDx3 Preferred Stock, CDx3 Perfect Market Index, CDx3 Bargain Table are trademarks of Del Mar Research, LLC. All rights reserved. DISCLAIMER: The content of this CDx3 Newsletter is to be regarded as educational, rather than advisory. There can always be exceptions to trends and/or generalizations that may be discussed herein. Consider your financial resources, goals and risk tolerance before investing. You, and not Del Mar Research, LLC, are solely responsible for your own investment decisions.
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There's
a lot to like about preferred stocks. And many aspects of selecting,
buying and selling the highest quality issues are misunderstood.
Here are a few frequently asked questions that illustrate some of
the more subtle points of preferred stock investing.
