Preferred Shares of Banks
Preferred shares are depressed. Any big bank preferred share selling at
$19 -$20, with a par of $25,dividends +5% seem like a buy. This is money that will not be needed for plus 5 years, the dividend would be reinvested. In this low interest rate environment seem they would be called once the crises is over.See limited risk to capital. Thanks for your time on WGN, Thoughts.
Terry Says
Here’s the reason bank shares, including preferred shares, have fallen. The banks won’t fail; the Fed has made that clear. But banks can’t make money at low interest rates. There is no “spread” for profit. So there’s concern that they may not be able to pay the promised dividends — at least for a while. To buy now is to speculate on the future of those dividends.
