This week's Blue Harbinger Weekly reviews three top big dividend preferred stocks. They all offer large dividend yields and significant price appreciation potential. This report is a continuation of our free report titled Five "Good" Big-Dividend Preferred Stocks.
3. Allergan Preferred Series A (6.7% Yield)
Allergan (AGN and AGN-A) is a rapidly growing, highly profitable, specialized pharmaceutical company that is currently trading at an attractive price. One of its main competitive advantages is that it is located in business-friendly Ireland and therefore pays a very low tax rate. We first wrote about Allergan back in April following newly created US Treasury department rules that basically ruined the planned combination between Allergan and Pfizer. The shares declined sharply on the news creating an attractive buying opportunity. The shares have drifted slightly lower since then making now an even more attractive buying opportunity in our view, especially considering the big 6.7% dividend yield. We haven't yet purchased shares of Allergan, but we continue to watch them closely. You can read more about our views of Allergan here.
2. Tsakos Preferred Series C (9.0% Yield)
This is not the first time we’ve written about Tsakos Preferred Series C, and we continue to believe it presents a very attractive investment opportunity. Tsakos is a seaborne oil transportation company that offers preferred shares (series-C) with a 9.0% dividend yield. Tsakos makes more money when oil prices are low and supply is high (i.e. current market conditions), and the company has plenty of liquidity through the series-C call date. Net income has been ramping up in recent quarters, but the share price has not. We own shares of Tsakos common stock in our Blue Harbinger Income Equity portfolio. However we believe the series C preferred shares are very attractive too. You can read our full Tsakos report here.
1. Frontier Preferred Series A (11.7% Yield)
We believe Frontier’s 11.25% Mandatory Convertible Preferred Series A Stock (FTRPF) is an attractive investment for income-focused investors. The current annual yield is 11.7% paid quarterly on 3/31, 6/30, 9/30 and 12/31. The preferred shares are mandatorily convertible into common shares a little over two years from now on 6/29/2018. We believe Frontier will easily have the cash flows to keep paying the big preferred dividends, and we also like the common shares into which the preferred shares will convert in 2018. We believe Frontier preferred shares present an attractive opportunity for income-focused investors. You can read our full write-up on Frontier here.