Actually I did own this term preferred when it had a yield to maturity in the 8% area, but sold it all for $24.98 on 11/24/2024. The issue I am talking about is the Gladstone Lane 5% Term Preferred (LANDM) issue. Currently slated to be redeemed on 1/31/2026 and trading at $24.80–a less than 6% (more or less) yield to maturity is simply too little from a pretty marginal REIT.
Gladstone Land reported earnings for the quarter ending 9/30/2024 that were poor–a net loss of almost $6 million, although funds from operations of around $3 million. While the company is likely safe the reward of the term preferred is simply inferior to many other term preferred that are available.
If I was going to own a term preferred it would be at a current yield of around 7.75% to 8% of which there are a number available which are likely as safe as Gladstone Land. I do understand some of the attraction of the LAND issue–it is easy to understand versus a CLO owner like Eagle Point Credit Company (ECC). Maybe folks want to hold it as a ‘cash equivalent’?
Or — LANDO- 7.41% CYld preferred @ 20.41 , 3 yrs past call- likely to be called first, if at all?
Tim. How do we know .,,? a term..or regular Preferred..?? .Georges
Georges,
QOL is a good source. On that site, the name of the security tells us (usually? always?) what type it is, term or regular (perpetual). For example:
LANDM is called:
Gladstone Land Corporation – 5.00% Series D Cumulative Term Preferred Stock
LANDO is called:
Gladstone Land Corp., 6.00% Series B Cumulative Redeemable Preferred Stock
Isn’t the maturity date: 01/31/2026
Thanks Brett–corrected.
I am long LANDP and agree with the comments above.
Funny – today I swapped my LANDM to NEWTZ. They mature virtually the same day, and I added a bit more than 1% YTM. I got alerted to NEWTZ from a post last Friday (I think Reader Initiated Alerts – thank you!) that it was down to 24.41 on a big dump. I paid more than Friday’s close but ~7.5% YTM on my cost still works for me for a 1 year hold.
Good move mbg for an easy added 1%
In LANDP here and feeling okay – but this environment can spook a lot of things…
To me, the LAND issues are diversifiers. An event that took out one BDC would probably take out a bunch of BDCs. Similarly, an event that took out an mREIT would likely take out several. But I think LAND’s farmland assets are not as likely to move in tandem with the other issues I hold, including some from ECC. Now, is the diversification worth the yield I’m giving up? Good question.
Mike D – I agree with your premise—the numbers tell a different story of course but we all have various reasons for holding what we hold–there is no right or wrong.