|Bid||0.00 x 800|
|Ask||0.00 x 46000|
|Day's Range||36.51 - 36.64|
|52 Week Range||33.26 - 38.08|
|PE Ratio (TTM)||N/A|
|Beta (3Y Monthly)||0.86|
|Expense Ratio (net)||0.46%|
Dividend investing is all about owning investments that pay you -- and pay you well -- through thick and thin markets. And whether you are building a portfolio or living off of a portfolio in retirement, dividends equally make for better returns. If you are starting out and working to increase your portfolio, piling up dividend cash and re-investing, makes for a great deal more certainty over placing a bet that the general stock market will simply go up. And of course, in retirement, dividend cash is an excellent compliment to other retirement income.Source: Shutterstock In addition, dividends are one of the more valuable components of the performance of the general stock market. If you look at the return of the S&P 500 Index over the trailing twenty years, the S&P is up in price by 120.71%. But including the dividends, the return is 223.55%, which is 1.93 times better.But there is an even better means of investing for dividends which is even safer than the general stock market.InvestorPlace - Stock Market News, Stock Advice & Trading TipsPreferred dividend stocks. More than Mere CommonersCommon stocks are what make up the vast majority of the stock market and the model portfolios of my Profitable Investing. They represent equity in the underlying companies that issue them, and they rise and fall in price with the valuation and projections of success of those underlying companies. * The 10 Best Stocks to Buy for May Dividends are paid by the company without requirement and will fluctuate based on the cashflows and profits of the companies, guided by management.Preferred shares are a different kind of stock. They are issued by companies typically with a fixed dividend, paid quarterly. And while they do represent an interest in the companies' assets and businesses, their price will tend to be more stable than for common stock as they represent more of a debt of the company, much like a bond.They got their start back in the 19th century in the U.S. market, as railroads were seeking to expand their networks westward and needed capital. Bu since many of the railroads had already borrowed heavily in bank loans and bonds, investors were reluctant to lend more or buy more bonds.The solution was a hybrid of a security that would be sold as equity but with the certainty of higher dividend payments. And if the railroads failed, investors would be next in-line just behind bond holders and well ahead of common stock investors in getting paid.Preferred stocks became a success. And thanks to evolving credit and accounting and tax rules, preferreds became ideal for companies to issue them as an attractive additional form of capital.Preferred stocks have continued in the market, albeit at a lower number than for common stocks. And that's one of the things that makes them attractive. Being less noticed than common stocks, they tend to trade more under the radar of traders, and that makes them more ideal for individual investors who seek less volatility with more certainty of higher dividend payments.This reduced volatility means less stock market risk when compared to common stocks. If you look at the trailing 12 months and compare the volatility of the S&P 500 Index of common stocks and the S&P Preferred Stock Index, you'll see that on a 100-day basis, the current volatility of the S&P 500 is running at 16.7% while the Preferred is running at only 5.5%. And even at the recent peak in volatility in February of this year, the S&P 500 volatility was running at 21.7% while the Preferred Index was merely a blip at 6.1%.Lower volatility and more certainty in dividend distributions make preferred stock the preferred dividend strategy. Preferred Stock PerformanceIn addition, there are fewer indexes that track the market for preferreds and even those that do, don't necessarily fully reflect the broad variety of the shares. Instead, most of the indexes focus on banks and financial firms' preferred stocks which can distort the true attractiveness of many of the individual issues.But they do continue to perform. For the past trailing five-years, the S&P Preferred Stock Index has shown a total return of 28.12% for an annual equivalent return of 5.08%. Again, with a whole lot less volatility along the way as noted above.S&P Preferred Stock Index Source BloombergThis means that the security of preferred shares, along with declared dividends, is no major sacrifice. A Preferred Fund, ETF and Stocks to BuyTo start investing in preferred stocks, there are three main ways to proceed -- mutual funds, exchange-traded funds and individual preferred stocks.One of my favorite funds is the closed-end Flaherty & Crumrine Preferred Income Opportunity Fund (NYSE:PFO), with a 6.6% dividend yield. It is trading at a small discount to its net asset value, making for an even better buy right now. It has a series of preferred stocks in banks and insurance companies, as well as utilities, pipelines and other issuers. And its return over the past five years has been even better than the Preferred Index noted above. The fund has turned in a return of 40.4% for an average annual equivalent return of 7%.Then on the ETF front, one of the more prominent is the iShares Preferred and Income Securities ETF (NASDAQ:PFF). It tracks the general market for preferred stock with synthetic representation in financials, utilities, pipelines and other industry issuers. And it has turned in a return over the past five years of 23.8%, including its current dividend yield of 5.9%Then, for some individual preferred stocks, I have a collection of them inside the model portfolios of my Profitable Investing that come from varied industries. These companies are well-supported to pay ample dividends while taking more risk off of the table from common stocks. And here, I'll suggest a few of them.Now a word on buying these stocks. They do not trade with much volume, and with good reason. They are mostly bought by individual investors and funds that serve them, so they tend to be bought and owned -- not traded. So, when placing orders, use a limit near the current quote and watch to buy them strictly under my buy-under price recommendations.In addition, I'm recommending buying my small collection together. Spreading around your own allocation to preferred stocks will limit your risk and will make it easier to buy them in smaller sums at better prices rather than spiking market prices with larger individual buys. And note, that I provide the symbols for each of the preferreds along with the CUSIP or ISIN numbers which can be used to make certain that you buy the right issues.So, let's get on to my recommended bigger dividend preferred buys.Seaspan Corporation (NYSE:SSW) is sort of a real estate investment trust (REIT) of container ships. It leases out its ships to various companies on longer-term contracts. As such, it focuses on making contracts with viable operating shipping companies to maximize revenues from its fleet while controlling the risk of default.It has done a good job of this, with revenues up over the past year by 31.9% and ample operating margins sitting at 42.9%, which results in a return on common stock equity of 15.2% It has plenty of cash on hand and its debts are low at 55.2% of its floating and other assets, resulting in an under-leveraged landlord of the shipping lanes.It has a series of preferred shares as part of its capital. The preferred to buy is the 7.875% Series H Preferred shares (SSW.H, CUSIP 81254U304) that are currently trading at $24.76 for a yield of 7.95%. This preferred is perpetual, meaning that there is no maturity. However, there is a call that the company can make to buy it back at $25 starting on August 11, 2021.Teekay LNG Partners (NYSE:TGP) is a passthrough that is focused on shipping liquified natural gas (LNG) as well as other petroleum products. The U.S. LNG export market continues to expand, particularly with the increased production of natural gas in the US and the expansion of pipelines and marine terminals for LNG. With global demand for LNG remaining strong as it replaces coal as the preferred form of energy -- companies upstream to downstream continue to see further progress.Teekay has rising revenues climbing by 18% over the trailing year. And operating margins are fat at 28.90%. And like for Seaspan, debt is manageable with debt to assets running at only 60.70% making for a lower leveraged company.The company has two preferreds in the market. I'm recommending the 9.00% Series A Preferred (TGP.A, ISIN MHY8564M1131). It is another perpetual maturity with a call on Oct. 5, 2021 at $25. It is trading at $25.50. for a yield of 8.8% and a yield to the next call of 8.3%.NuStar Energy (NYSE:NS) is a passthrough company with 8,700 miles of pipeline for refined petroleum products with additional pipelines for crude oil and other petroleum-related products. It also provides services for marketing companies in the Caribbean and South American marketsRevenues are positive gaining 8.10% over the past year and operating margins are ample at 18.5%. Like the other companies with preferred recommendations, it has controlled debts at only 49.3% of its ample assets.It has a series of preferred stocks as part of its petroleum logistics. I'm recommending the 8.5% Series A Preferred (NS.A CUSIP 67058H201) it has a fixed dividend of 8.5% through to December 15, 2021 at which it will shift to an adjustable dividend at the US three-month Treasury yield plus 6.766%. the price for the preferred is trading at $23.70 for a current yield of 9.77%.Neil George is the editor of Profitable Investing and does not have any holdings in the securities mentioned above. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * The 10 Best Stocks to Buy for May * 5 Elephant-Sized Companies Warren Buffett Could Buy * 7 Cheap ETFs for Novice Investors Compare Brokers The post Boring but Beautiful and Bountiful Dividend Stocks appeared first on InvestorPlace.
The U.S. economy and markets are providing a collection of tailwinds for specific industries and investments. And it is resulting in a buoyant general stock market that has the S&P 500 Index up 11.25% year-to-date.But rather than just betting on the general stock market, I have a collection of market segments that will help you construct a better overall portfolio for growth and income, all with less risk and better-balanced returns for the year. * 10 Blue-Chip Stocks to Lead the Market Specifically, I'm talking about a few key exchange-traded funds (ETFs) to buy. With that said, let's dive into the best ETFs to buy for specific sectors.InvestorPlace - Stock Market News, Stock Advice & Trading TipsSource: Bloomberg BanksI'll start with one of the most stellar market segments that you've probably been ignoring: regional banks. Mention regional banks and many investors will yawn and look away, but this is not only one of the best performing segments of the stock market, but also one of the cheapest values right now. Here's the lead, the regional bank stocks embodied in the KBW Regional Bank Index as synthetically represented in the SPDR S&P Regional Banking ETF (NYSEARCA:KRE) has generated a YTD return of 20.88%.That's of course more than twice the S&P Index and there is more to come. Banks have been hobbled by legislative and administrative regulation over the past decade following the financial crisis of 2007-2008. The result has been that banking became a treacherous business resulting in the high-cost of loan origination as well as other consumer and business bank products. But last year saw a series of legislative reforms as well as administrative changes to provide relief for banks -- particularly for regional and smaller banks.In addition, with the Federal Reserve Bank's Open Market Committee (FOMC) working to guide interest rates to more normalized levels, banks have begun to have breathing room to better price deposits and loans resulting in higher net interest margins.Then there is the Tax Cuts & Jobs Act of 2017 (TCJA), which has resulted in improving net profitability for domestic banks.The stock market didn't really care until now. But since many of the quality banks in the KRE ETF are still valued at either discounts or smaller premiums of book value than traditionally valued, banks are still very good value.Source: Bloomberg REITsNext up is another market segment that's done better than the S&P 500 for the year while continuing to provide better performance over last year as well. Real estate investment trusts (REITs) continue to benefit from the stronger U.S. economy, which fosters demand for properties and supports rising lease income. The result is that REITs are being recognized for their underlying good assets on top of the higher yields offered. * 10 Monthly Dividend Stocks to Buy to Pay the Bills One of the best REIT ETFs to buy is the Vanguard Real Estate ETF (NYSEARCA:VNQ). This ETF has exposure to some of the best REITs in the U.S. market. The YTD return is running at 11.87%. Moreover, REITs, much like banks noted above are still valued at a lower price-to-book ratio than tradition levels pre-2007. Add in the additional benefit of the TCJA providing individual investors with a 20% deduction of taxable income from REIT dividends and the REIT space looks even more lucrative.Source: Bloomberg Preferred StockSimilar to the other investment segments above, preferred stock is another overlooked sector of the market. Preferred stock provides a bond-like investment with higher established dividend yields that can be depended upon for income in any portfolio. And they also provide a good backstop for portfolios when, not just if, the general common stock market takes a pause or worse.Preferred stocks are faring well so far this year. And one of the easiest means for "synthetically" investing is in the iShares Preferred & Income Securities ETF (NASDAQ:PFF). The ETF has turned in a YTD return of 6.20%. And it offers a nice dividend yield currently running at 5.61%.Source: Bloomberg UtilitiesUtilities also provided a good alternative to the general stock market's downturns last year. And so far this year, utilities continue to perform well. Utilities are typically structured between regulated and unregulated business units. The regulated businesses provide core local essential services with rate charges and margins set by local public utility commissions (PUCs). This provides dependable profits that form the base for reliable dividends making utilities good hedges for vacillating general stock markets.The unregulated businesses are typically ancillary activities on a national or global scale often involving power generation and transmission or pipeline operations. It is this side of the utilities that provides companies and their shareholders with further growth opportunities as well as higher dividend distributions. * 8 Cheap Stocks That Cost Less Than $10 One of the best ETFs to invest in the utilities segment is the Vanguard Utilities ETF (NYSEARCA:VPU). The ETF has a YTD return of 7.02% and provides exposure to a great collection of utilities with regulated and unregulated business units. In addition, it also generates and pays a nice dividend along the way currently yielding 3.22%.Source: Bloomberg HealthcareThe U.S. is a nation that is aging and becoming ever less healthy. This isn't a good mix for one of the leading economies of the planet. In a recent study by the U.S. Department of Commerce and the U.S. Census, by 2035, which is not that far away, it is projected that 78 million folks will be 65 years or older. And by that same year, those at or under the age of 18 years will be 76 million.This will be a significant change in the demographics of the nation, which has traditionally been a younger nation with more healthy and able folks to produce more for the economy.And it gets worse when it comes to the health of the overall population whether old or young. The Mayo Clinic recently released its extensive study of the health of the population and is saying that 3% or less is living a healthy lifestyle. This is not surprising as all that it takes is to take a stroll around many neighborhoods around the nation and do some people watching. We are a nation of fatter people that don't look like they could run up a flight of stairs let alone walk up one.The U.S. Center for Disease Control (CDC) just released a study and survey that indicates that 36.50% of the U.S. population is obese. This sets up the nation for more diabetes and all of the ancillary health effects of that disease. And then there is heart health and its complications. And if you're obese, slipping and falling is easier to do resulting in more injury risks.Add in a high poverty rate which can lead to further health challenges for young and old and other factors showing health troubles, including infant mortality and the nation doesn't look too healthy.And of course, last year we saw that life expectancy in the U.S. population stopped seeing improvements with some segments dropping in life years still to come. And as we know, the end of the line is where healthcare really ramps up to keep those alive a bit longer.No wonder that healthcare spending is big in the U.S. and climbing quickly. According to the U.S. Centers for Medicare and Medicaid Services (CMS), healthcare spending increased in 2017 by 3.90% to $3.9 trillion or $10,739 per person. This represents 17.90% of the then gross domestic product of the U.S. (GDP).And it is getting worse. The CMS projects that spending between 2017 through 2016 will continue to rise by an average annual rate of 5.50%, reaching $5.7 trillion. And given projections for GDP for the period, that would come closer to 20% of the overall economy.Now this isn't good news for the U.S. population, but it does provide for a silver lining for us as investors as investing in health is a good source for income and gains, even though they come from the increasingly ill of the economy.One of the best ways to get general exposure to the healthcare market is through the Vanguard Health Care ETF (NYSEARCA:VHT). This ETF has generated a YTD return of 8.11% and provides for well-diversified exposure to the leading healthcare stocks in the U.S. market.Source: Bloomberg Information TechnologyInformation technology continues to be one of the more exciting market segments that is easy to grab the attention of individual investors. After all, who doesn't like the latest new gotta-have gadgets whether in hand-held devices or the latest apps. This segment has plenty of companies that grab headlines and consumers' interest year in and year out.But one of the bigger stories isn't just about the next new-new thing, but rather the new way of making profits. More technology companies are moving away from depending on unit sales of gizmos and apps and more toward subscription sales. This is resulting in the rise of recurring income, which is not only more reliable than one-off unit sales, but it also provides the ability for technology companies to build-up their technology empires with more certainty.The result is that the companies in this space that have been successfully shifting to recurring income are driving more profits and better performing shares. That was the case last year in the segment generating positive returns, but also so far this year. * 7 of the Best Biotech ETFs The easy way to invest in the best of the information technology segment is in the Vanguard Information Technology ETF (NYSEARCA:VGT). This ETF has generated a YTD return of a whopping 15.98% and given the demand for the underlying products and services including for cloud computing and the emergence of fifth-generation wireless communications (5G), this segment and the ETF should remain in the green for the year.Source: Bloomberg Oil & GasOil and gas remain a lucrative market as the U.S. continues to emerge as the world's leading producer of the petrol patch. Global demand remains robust for crude oil and refined products and natural gas particularly in more easily transportable liquified natural gas (LNG) is driving profits for U.S. companies.In addition, the softer pricing, particularly for crude oil, prior to last year provided the incentive for producers to increase their field exploration and production (E&P) efficiencies. This, in turn, is providing for profitability, even at lower crude oil and natural gas prices.And one of the limitations for U.S. companies has been the lack of additional capacities in pipeline and marine terminal facilities for both oil and gas. But thankfully to the current administration, approvals have spurred additional and expanded lines and facilities providing for more deliverable petrol for more cashflows for U.S. companies.And then we have the Organization of Petroleum Producing Countries plus Russia (OPEC+). OPEC+ has come through with production limits which is also aiding petrol prices and operating margins for U.S. petroleum companies.The best ETF to invest in this segment is the Energy Select Sector SPDR ETF (NYSEARCA:XLE). This ETF has exposure to the up, down and midstream petrol companies. And it has generated a great YTD return of 15.29% with many inside the market segment still valued at lower levels of underlying book and trailing sales. Add in the dividend yield of 3.22%, and it makes for another in my collection of best ETFs for growth and income.Neil George is the editor of Profitable Investing and does not have any holdings in the securities mentioned above. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Consumer Stocks to Buy and Hold for Years * 4 China Stocks Soaring on Trade Hopes * 3 Esports Stocks to Benefit From the Boom Compare Brokers The post 7 of the Best ETFs to Buy for a Rock-Solid Portfolio appeared first on InvestorPlace.
The iShares S&P US Preferred Stock Fund (NASDAQ: PFF), the largest exchange traded fund dedicated to preferred stocks, is getting a new index. Preferred stocks are a type of hybrid security that show bond- ...
As the name suggests, preferred gives the shareholder a place in line ahead of common stock holders, whenever a company pays dividends or distributes assets to shareholders. In other cases, should dividend payments be missed, preferred shareholders get all of their dividend payments before the common shareholders receive anything. Preferred stock might offer more stable cash flow than common stock.
Preferred stocks and the related exchange traded funds are high-yielding, income-generating assets. The downside is that such assets are often perceived to be vulnerable to rising interest rates, but the iShares S&P US Preferred Stock Fund (PFF) is higher by nearly 2.60% year-to-date. The shares are issued by financial institutions, utilities and telecom companies, among others.
Higher inflationary expectations and rising rate worries are prevalent across the world. The Fed enacted two rate hikes in the first half and offered a hawkish guidance for the whole year. The central bank is now planning two more hikes this year. Upbeat U.S. economic recovery and a tight labor market led the Fed to be hawkish.Source: Shutterstock
Remember the time when the Federal Reserve was not raising interest rates? Those were the glory days for preferred stock funds. Yield-starved investors flocked to preferred stock funds in search of additional income.
In doing so, bond buyers and bankers were reticent to extend further credit to many of the railroad companies. The successful pitch was that preferred stock would pay a fixed dividend much like a bond.
Preferred stocks - a high-yield asset that's typically referred to as a stock-bond "hybrid" because it has characteristics of each - are treading water this year after a strong showing in 2017. But that's OK. Preferred stocks typically aren't bought for upside potential - it's about stability and income. "Straight preferred stock funds without other equities are fixed-income securities with a low correlation to the stock market," says Jay Hatfield, founder and chief executive officer of Infrastructure Capital Advisors (InfraCap) and co-portfolio manager of the Virtus InfraCap U.S. Preferred Stock ETF (PFFA). He adds that they can reduce portfolio volatility "and be used to rebalance during down markets." Now might be the right time, considering the rising-interest-rate atmosphere. While preferreds "have long duration and are sensitive to movements in long-term interest rates," Hatfield and his team expect the 30-year Treasury to stay in the 3%-3.5% area, which means preferred stocks "will be attractive with yields of over 6%." Eric Chadwick, president of preferred-stock specialist Flaherty & Crumrine, also downplays any interest-rate risk. "Preferreds tend to perform well relative to other fixed income in periods of rising interest rates, although the path may be bumpy along the way," Chadwick says, adding that preferreds tend to price in interest rate hikes early. Here's a look at 10 funds that can help you jump on this income opportunity in preferred stocks. Chadwick and Hatfield both suggest investing in a broad, actively managed preferred-stock funds, though investors looking for inexpensive options have their pick of a couple cheap exchange-traded funds, too. Let's dig in: SEE ALSO: 53 Best Dividend Stocks for 2018 and Beyond