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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 7 preferred income closed-end funds.

Preferred Income CEFs
Stock
Price Quote & Dividend
1-Yr Price 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
Price and dividend data from Quandl.


To inspect the performance of the Preferred Income CEFs portfolio, see the returns table and chart below. Portfolio values are computed using quarterly closes for from Quandl.

The 6 included in the portfolio computations are: PFD, PFO, HPI, HPF, HPS and JPS. The current value of the portfolio assumes that $1,666.67 was invested (total of $10,000) in each at its closing weekly price for the current date in 2007. BTZ was excluded from the portfolio computations because of insufficient price data.


Preferred Income CEFs - Return Results
Portfolio:
Preferred Income CEFs
Start date:
Oct-20-2007
Start value:
$10,000
End date:
Oct-20-2017
End value:
$25,879
Number prices
41
Minimum value occurred on Mar-31-2009
$5,679
Maximum value occurred on Jun-30-2017
$26,038
Total gain or loss (Start date to End date)
158.79%
Annualized gain or loss (Start date to End date)
233.99%
Total dollar value on End date of a $10,000 purchase made on Start date
$25,879
Average percent return for all possible buy/sell combinations
63.30%
Number returns
820
Number profitable returns (Winners)
730
Percent profitable returns
89.02%
Number unprofitable returns (Losers)
90
Percent unprofitable returns
10.98%
Winners to losers ratio
8.11
Stock Return Calculator


Click chart to enlarge it.



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Preferred Stocks Deliver High Yields