Published Fri, 14 Sep 2018 09:15:00 -0400 on Seeking Alpha
Looking for a high-yield income vehicle with robust coverage and rising rate protection? Take a look at CAI International (CAI), not for its common shares, but for its two new preferred shares, which both IPO'd in 2018.
Profile: CAI International, Inc. operates as a transportation finance and logistics company in the United States and internationally. The company operates through three segments: Container Leasing, Rail Leasing, and Logistics. It leases, re-leases, and disposes equipment, and contracts for the repair, repositioning, and storage of equipment.
(Source: CAI site)
Preferred Dividends: CAI International 8.50% Series A Fixed/Floating Cumulative Redeemable Perpetual Preferred Stock (CAI.PA) and CAI International 8.50% Series B Fixed/Floating Cumulative Redeemable Perpetual Preferred Stock (CAI.PB) both offer 8%-plus yields with very robust coverage.
CAI.PA IPO'd on 3/22/18 and CAI.PB IPO'd on 8/6/18. These are both cumulative shares, meaning that CAI must pay you for any skipped dividends. Since CAI doesn't currently pay a common dividend, there isn't the usual added protection for preferred shareholders, in knowing that management can't pay out common dividends before paying preferred shareholders for any skipped dividends.
These are qualified dividends and qualify for the 15-20% tax rate. Shareholders get a 1099 at tax time, not a K-1.
Both shares pay in a Jan/April/July/Oct. sequence... Read more
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