Added Utilities Preferreds

I have added a listing of $25 utility income securities.  I added in the format of all preferreds, baby bonds and trust preferreds in 1 list.

We did NOT use $50 and $100 issues as they are already on another listing and they may not be of interest to many of the folks on here.  Also we did not use the issues from the “fake utilities”–Spark Energy, Just Energy and Genie.

The new list can be found here and is linked in the “Preferreds” tab.

We do notice a few quotes ‘hanging up’ and will check to see if those few can be repaired.

20 thoughts on “Added Utilities Preferreds”

  1. About half the list here seems to be California utilities, and California has some rather unique ideas about liability which increase the risk of owning utility related investments there. Everyone needs to be aware of that.

    1. Scott, “inverse condemnation” casts a dangerous shadow over a CA utility’s financial health. Still, I may go in for a small trade if I can time it right.

  2. Tim- I own PPL baby bond that I don’t see. Ticker symbol PPX. Maybe I am missing something.

  3. Pretty sad looking list, Tim…Go back 3 decades and one would have had 4 times the options to choose from. Utes have largely abandoned the preferred stock method of financing/capitalizing anymore…You can add a few though to the list…The old Alabama Power series, plus ALP-Q which was the last underwritten QDI ute preferred in 2017 prior to NI-B.

    1. Yes Grid you are right–but you still have the 50 and 100 dollars lists–still kind of sad.

      Let me check the Alabama Power items.

  4. I have a slight conundrum. Preferred stocks were purchased at decent discounts to “par” and promptly went up an equivalent of 1.5 – 2 years worth of divys in price. Would you hold and collect some dividends, or lock in the cap gains? I know there are a few variables, but from a general risk perspective I’m not sure what the best action would be.

    1. Tech guy – I have had the same thoughts but I bought the preferreds to try to establish an income in retirement so I am keeping my finger off the trigger. I’ve got 6% gain in ENBA since early December and 9% in KIM-L, still under par though so I am going to hold. A high quality problem, as they say.

    2. Tech, it depends on your original purchase intent. If you bought for income only then it may not matter. Some buy and hold and hold and hold…I have several I am not letting go of. But some I buy for income but will take the cap gain if laying there. Especially if one of similar quality is available to roll into at better price point.
      You need to know if it would bother you if you didnt sell and it dropped…Conversely you need to know if you sold and do not have anything to invest in would that be a problem also? Generally they are meant to be bought and held for income once a proper entry point has been determined. The opportunity to sell and repurchase at lower price point may or may not occur.

    3. Tech guy–bingo–it is a conundrum–even I have had those thoughts. The way my ultra conservative brains works is this – if I have a 3% gain now and sell everything and put it in a money market at 2.3% I have a 5.3% gain on the year. I won’t do this, but it does change my thoughts on the need to race to get fully invested.

    4. The old question is “compared to what”? My guess is that you will not be selling to keep the funds in cash. After your gain, and any tax obligation, would you reinvest in a security that has the same current yield as the security you hold? If you can achieve one of your objectives by making a trade, great. Another option to consider is waiting for a year (assuming the stock is in a taxable account) until you can take LT capital gains, and then considering whether you have better alternatives for the money

    5. Thanks folks for sharing your thoughts. I’ll probably sell a couple if the market looks weak. A few of the others have a 10%+ yield from my buy point and are with currently stable companies.

    6. I will give you one further thing to think about. Time out of market can be important too. You will have episodes where issues will fall, and they might not always recover so quickly as they did with this little tantrum. That being the case, if you can capture your gains for the year, and increase your chances of being out of the market during those downturns you will be positioned to take advantage of any deals which come along. Even in a flat market there will be opportunities in thinly traded issues whose prices will bounce around. And (more experienced hands may correct me) with preferreds you don’t seem as likely to miss a huge spike upwards not preceded by a downturn as you are with other investments. There is a limit to price appreciation due to the nature of the investment.

      I usually buy and hold, but I know myself, and when there is a sharp downturn the temptation to sell to avoid further loss is strong. I managed to avoid that with all but one issue this time around, and picked up some bargains along the way. But if I had banked some profits when things were riding high, and had more cash sitting around then I could have weathered things better both from a temptation standpoint, and from being able to make more purchases at good prices. No one investing style is right for everyone.

      1. My brain must be hooked up differently than most. I never think about selling when prices are down. Not in 1987, not in 2001-02, not in 2008-09. And now that I see the finish line of retirement coming up in the next few years, every new purchase I make, whether a common or a preferred, is with the mindset of “buying income”. Over the last couple weeks, I’ve bought almost $5K of solid income. Yes, preferreds can be called, and I suppose they can suspend payments or even BK (although I’ve yet to see one do that). But I only see drops in price as opportunities to buy more income.

  5. Hi Tim, not sure if its me but the preferred util list seems to be cut off after the 1st call column.

    1. Hi Citadel–I am seeing everything on my screen. Maybe some others will chime in and let us know if they see issues.

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