Preferred Shares
There are two types of stock issued by a company: common and preferred. Preferred stocks typically have no voting rights (unless a specified number of dividend payments have been missed). Preferred shares are entitled to a fixed dividend payment. In the event of company bankruptcy, preferred shareholders have a higher priority claim on company assets than common shareholders.
J.P. MORGAN CHASE & CO. $33 (New York symbol JPM; Income Portfolio, Finance sector; Shares outstanding: 3.8 billion; Market cap: $125.4 billion; Price-to-sales ratio: 1.8; WSSF Rating: Average) has bought back the $25 billion in preferred shares that it sold to the U.S. Treasury under the Troubled Asset Relief Program (TARP) last year.
The bank expects to record a $1.1-billion charge …read more »
BANK OF NOVA SCOTIA 6.25% SERIES 26 PREFERREDS $24.90 (Toronto symbol BNS.PR.T) pay quarterly dividends at a rate of $1.5625 annually and have a current yield of 6.28%. Dividends are paid in April, July, October and January.
Like most Canadian financial institutions, Bank of Nova Scotia’s preferred dividends are non-cumulative. That’s because it’s more advantageous for banks to classify their preferred …read more »
Canadian banks have recently issued new preferred shares to raise capital. To attract investors in a time of weak stock markets, they’ve issued these preferreds on especially attractive terms.
The preferreds pay dividends that give them yields of 6.25% to 6.50%. That’s higher than current Government of Canada long-term bond yields of 4% or so.
What’s more, preferred dividends are treated the …read more »
ALLIANT ENERGY CORP. $29 (New York symbol LNT; Income Portfolio, Utilities sector; Shares outstanding: 110.5 million; Market cap: $3.2 billion; Price-to-sales ratio: 0.8; WSSF Rating: Average) expects that it earned $2.65 a share in 2008. However, earnings for 2009 will likely drop to between $2.18 and $2.48 a share as the slowing economy has hurt electricity demand. The stock now …read more »
BANK OF AMERICA CORP. $15 (New York symbol BAC; Conservative Growth Portfolio, Finance sector; Shares outstanding: 5.0 billion; Market cap: $75.0 billion; WSSF Rating: Average) aims to complete its $20 billion, all-stock acquisition of brokerage firm Merrill Lynch & Co. Inc. by the end of 2008. The purchase will make Bank of America one of the world’s biggest financial services …read more »
BANK OF NOVA SCOTIA $38 (Toronto symbol BNS; Conservative Growth Portfolio, Finance sector; Shares outstanding: 990.0 million; Market cap: $37.6 billion; SI Rating: Above average) is Canada’s third-largest bank after Royal Bank and Toronto-Dominion Bank, with total assets of $462.4 billion. It provides a wide variety of financial services through 2,560 branches and offices in Canada and over 50 other …read more »
The worldwide credit crisis has hurt all of Canada’s big five banks. Still, we continue to have a positive view of all of them. The banks have already taken substantial writedowns, which may cover most of the damage. As well, Ottawa’s new plan to buy up to $75 billion of home mortgages from the banks, if needed, further cuts their …read more »
GENERAL ELECTRIC CO. $19 (New York symbol GE; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 10.0 billion; Market cap; $190.0 billion; WSSF Rating: Above average) earned $0.45 a share in the third quarter of 2008, down 10% from $0.50 a year earlier. That’s mostly due to a 33% drop in profits at GE’s finance division, which accounts for …read more »
BANK OF AMERICA CORP. $23 (New York symbol BAC; Conservative Growth Portfolio, Finance sector; Shares outstanding: 5.0 billion; Market cap: $115.0 billion; WSSF Rating: Average) continues to take advantage of the turmoil in the financial services industry to expand its operations.
Earlier this year, Bank of America acquired mortgage specialist Countrywide Financial Corp. It has now agreed to buy troubled brokerage …read more »
WELLS FARGO & CO. $31 (New York symbol WFC; Conservative Growth Portfolio, Finance sector; Shares outstanding: 3.3 billion; Market cap: $102.3 billion; WSSF Rating: Average) provides a wide variety of financial services to nearly eight million customers through roughly 6,000 branches and offices in 23 states. Internationally, it operates in Canada, the Caribbean and Central America. Warren Buffett’s Berkshire Hathaway …read more »
