If you like to earn high income on your investments, and you are frustrated with artificially low interest rates (thanks to the Fed’s meddling), you might consider preferred stocks. They offer compelling high yields, and less volatility risk than many other high yield opportunities. And while price appreciation is not usually the primary goal of preferred stock investors, some of preferred stocks can offer attractive price appreciation potential, if you select them right. This is part 1 of this week’s Blue Harbinger Weekly, and we are sharing our views on high yield preferred stocks as well as specific attractive opportunities.
If it’s steady high-income you’re looking for, Seaspan’s series I preferred shares (SSW.PI) are worth considering. You shouldn’t expect any price appreciation for these shares (they’ll continue to hover right around $25), but the big quarterly dividend payments are supported by a strong growing business (Seaspan’s fleet has grown dramatically while simultaneously increasing operational efficiency), strong financials (access to cash on favorable terms) and favorable industry dynamics (demand for Seaspan’s differentiated fleet). Further, the 7.8% dividend yield will go a lot farther than most other income investments, and it’ll do so with considerably less volatility risk and stress.