The 5th 3rd Preferred Dividend

Fifth Third Bancorp Announces Cash Dividends

Excerpt:

Fifth Third also declared a cash dividend on its 6.625% Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series I (Nasdaq: FITBI), at the rate of $414.06 per preferred share, which equates to approximately $0.41406 for each depositary share. Each depositary share represents a 1/1000th ownership interest in a share of Series I Preferred Stock. The Series I dividend is payable on March 31, 2017 to shareholders of record as of March 29, 2017.

Comment: Buy 100 shares today ... get $ 41.40 next Friday. 5.71% yield. Preferred stock tracts like a bond so as interest rates rise, the stock will decline. Image snaps from ...

Preferred stock an alternative to bonds

The ‘Preferred’ Path to Higher Returns

Excerpt:

Investors need to consider bond substitutes that can provide stability, safety and relatively attractive returns.

One such substitute is investment-quality preferred stocks. Preferred stock is a kind of hybrid security that sits between bonds and common stock in a company’s capitalization.

Preferreds are senior to common stock in terms of payment of dividends and claims on assets, but junior to bonds. Usually, preferreds have a fixed dividend (although some float with some fixed premium to short-term rates).

Preferreds are rated by the major credit-rating firms. Those offered by large companies carry investment-grade ratings but are rated lower than bonds because of their junior status. They do, however, have a substantial advantage over bonds for individual investors.

Bond interest is taxable at regular personal income-tax rates. Preferred stock dividends are generally taxable at long-term capital-gains rates, which under current laws are set at a maximum of 23.8% versus a maximum rate almost twice as high for interest income.

Comment: Image source Wiki 

WFC-Q - another Preferred example

Wiki article: Preferred stock

PGX: Preferred stock ETF

PowerShares PGX

Comment: Image Source. PowerShares PGX page. Top holdings below:

PFF: Preferred stock ETF

Noteworthy ETF Inflows: PFF
Should You Prefer Preferreds in 2013?
Excerpt:

Preferred stock confuses beginning investors because its name is misleading. What makes a stock preferred isn't whether it's a smart investment but rather where it lies within a company's capital structure. Most of the time, companies have two main tiers of capital, one they obtain by issuing bonds and the other from making offerings of equity. Bondholders have fixed return potential, as the payments they receive are strictly defined by the terms of the bond, but they also enjoy the highest priority to get repaid no matter what happens to the company. By contrast, equity shareholders have potentially unlimited returns, but they also have to go to the end of the line if the company goes under and often come out with nothing.

Preferred stock lies in the middle of the capital structure. Like bonds, preferred stock typically pays a fixed interest rate and has priority over common shareholders, in that preferreds are entitled to get a certain value back before the common receives payment. Moreover, preferred dividends have advantages that common-share dividends lack, again depending on the terms of the preferred. But when it comes to growth potential, preferred stock doesn't look like stock at all -- it tends to move with interest rates rather than with a company's fundamental prospects. For many investors, the idea of getting solid income without the volatility of common shares may seem like a trade-off worth making

Comment: Image source. Wiki article on Preferred Stock.  PFF provides a nice diversified ETF way to invest in preferred stock. Another option is PGX.

The following features are usually associated with preferred stock:

• Preference in dividends
• Preference in assets, in the event of liquidation
• Convertibility to common stock.
• Callability, at the option of the corporation
• Nonvoting

Below images show the top holdings, credit breakdown, and sector holdings of PFF. The yield is 5.95%