Published Mon, 28 Sep 2020 08:35:00 -0400 on Seeking Alpha
Seeking AlphaDividend Ideas | Financials DFP: Monthly-Pay Quality Preferred Stock CEF Yielding 7.4%Sep. 28, 2020 8:35 AM ET|| About: Flaherty & Crumrine Dynamic Preferred and Income Fund, Inc. (DFP), Includes: ET, ETP, FFC, HPI, HPS, JPS, PFD, PFFby: Rida MorwaRida Morwa High Dividend OpportunitiesThe #1 Service for Income Investors and Retirees, 9-10% dividend yield.SummaryDFP is managed by Flaherty & Crumrine, a manager we like and offers a smaller premium and higher yield than some of its other funds.
With the Fed keeping rates lower longer, preferred shares are quite attractive.
The diversification and leverage of DFP make it an attractive addition to the fixed-income portion of a high-yield portfolio.
Co-produced with PendragonY
Why recommend buying preferred shares now?
Income investors looking for defensive exposure to high-yielding securities are well served by investigating the preferred shares sector. While most are up from their lows in March and April, plenty of preferred shares offer very attractive prices and many still trade well below their respective par value. As we head into the final quarter of 2020, the economy continues to improve. While that will likely mean that common stock will be able to pay and grow their dividends, preferred shares have a safer dividend payout, and room for capital appreciation too. Also preferred stocks provide a good hedge against market volatility as their share price tends to fluctuate much less than common stocks.
As recently reported by the Federal Reserve, they plan to keep interest rates low for the foreseeable future, even going so far as to tolerate some inflation higher than their target rate of 2%. Deflationary pressures today remain strong and will likely keep inflation modest. However, longer term, all that cash being printed could reignite inflation. The good news here is that income investors could invest in fixed-to-floating preferred stocks which have reset dates out in the future and... Read more
|Stock name||Last trade||P/E||Earnings/Share||Dividend/Share||Dividend yield|
|ENERGY TRANSFER PARTNERS||21.79||19.3||1.13||2.26||10.46|
|FLAHERTY & CRUMRINE/CLAYMORE PREF SEC INCOME FUND||20.35||4.8||4.25||0.00||6.62|
|FLAHERTY & CRUMRINE PREFERRED INCOME FUND||15.23||0.0||0.00||0.00||6.01|
|ISHARES S&P US PREFERRED STOCK INDEX FUND||37.21||0.0||0.00||2.08||5.60|
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