Are you an income investor? Consider including preferred stocks in your portfolio!
Investopedia defines a preferred stock as “a class of ownership in a corporation that has a higher claim on its assets and earnings than common stock. Preferred shares generally have a dividend that must be paid out before dividends to common shareholders, and the shares usually do not carry voting rights. Preferred stock combines features of debt, in that it pays fixed dividends, and equity, in that it has the potential to appreciate in price. The details of each preferred stock depend on the issue.”
With San Miguel Corporation (SMC) set to raise P33.5B from its Series 2 Preferred Shares offering, its a good time to look at the preferred stocks traded on the Philippine Stock Exchange (PSE). The below data are compiled from the offering prospectuses and PSE and excludes inactive stocks.
|Symbol||Issue Date||Offer Price||08/20/15 Price||Coupon||Months Payable||Dividend Yield||Optional Redemption||Optional Redemption Date|
|ACPB2||11/5/2014||500||530||5.58%||2/5/8/11||5.26%||5TH & 10TH YR||11/2019|
|MWP 1||12/3/2014||100||108||7.03%||3/6/9/12||6.50%||5TH YR||12/2019|
|PFP2 1||3/12/2015||1000||1,018||5.66%||3/6/9/12||5.56%||3RD YR||03/2018|
|PRF2A 1||11/3/2014||1000||1,046||6.30%||2/5/8/11||6.02%||5TH YR||11/2019|
|PRF2B 1||11/3/2014||1000||1,085||6.86%||2/5/8/11||6.32%||7TH YR||11/2021|
Dividend yield is calculated by annual dividend / price and is gross of 10% Philippine income tax on dividends.
Of course investing in preferred stocks is more than simply looking at the yields. One has to look at the Company and consider the risks involved as with any other investments. The investor should also decide if the investment matches his/her goals and time horizon.