Custom Search

Preferred Stocks and Preferred Income Funds Offer High Yields

A preferred stock trades like a stock but offers income like a bond. Preferreds are attractive because their yields are usually higher than corporate bonds of similar credit ratings. And preferred dividends are taxed at a lower rate than corporate bonds. Like bonds, preferred stocks usually trade in a narrow price range, but they can experience significant prices declines.

You can find information about specific preferred stocks at QuatumOnline, a free site. Or check with your broker.

In addition to individual preferred stocks, you can invest in convenient closed-end funds and exchange-traded fund that feature preferred stocks.

Here is a sample of 8 preferred income closed-end funds.

Preferred Income CEFs
Stock
Price Quote & Dividend
1-Year Price Chart
Dividend Chart*
BlackRock Credit Allocation Income Trust IV 
Flaherty & Crumrine Preferred Income Fund
Flaherty & Crumrine Preferred Income Opportunity Fund
John Hancock Preferred Income Fund
John Hancock Preferred Income Fund II
John Hancock Preferred Income Fund III
Nuveen Quality Preferred Income Fund 2
Nuveen Quality Preferred Income Fund 3
Click small charts (sparklines) to expand. * Uses 10 years or all years of dividends and prices, whichever is less.


To follow the progress of the Preferred Income CEFs portfolio, check out the returns table and chart below. Portfolio values are computed using weekly closes for stocks from Yahoo! Finance.

The 7 stocks included in the portfolio computations are: PFD, PFO, HPI, HPF, HPS, JPS and JHP. The current value of the portfolio assumes that $1,428.57 was invested (total of $10,000) in each stock at its closing weekly price for the current date for 2004. BTZ was excluded from the portfolio computations because of insufficient price data.


Preferred Income CEFs - Return Results
Portfolio:
Preferred Income CEFs
Start date:
Nov-29-2004
Start value:
$10,000
End date:
Nov-27-2014
End value:
$18,472
Number prices
522
Minimum value occurred on Oct-06-2008
$3,433
Maximum value occurred on Nov-24-2014
$18,472
Total gain or loss (Start date to End date)
84.72%
Annualized gain or loss (Start date to End date)
6.30%
Sharpe Ratio
0.46
Total dollar value on End date of a $10,000 purchase made on Start date
$18,472
Average percent return for all possible buy/sell combinations
33.17%
Number returns
135,981
Number profitable returns (Winners)
105,741
Percent profitable returns
77.76%
Number unprofitable returns (Losers)
30,240
Percent unprofitable returns
22.24%
Winners to losers ratio
3.50


Click chart to enlarge it.



Customize your own Portfolio of Preferred Income CEFs using stocks from the above table. See returns for specified combinations of stocks for specified durations.


Related Article


Preferred Exchange-Traded Funds (ETFs)
Preferred Stocks Deliver High Yields