First look at this chart, this stock hasn’t moved more than $1.00 in the last 3 years. Why would you possibly want to own it in your portfolio? Because it is a “money machine”!!!!
This is an excellent example of a “preferred stock” that is a money machine. It pays a current 7.70% quarterly dividend that is a “qualified dividend” for tax purposes. The dividend is fixed at $2.03/year. It trades under the symbol BCSPRD (Fidelity) you can look it up on Yahoo Finance under BCS-PD. Barclays Bank is a UK based and worldwide financial powerhouse. It carries a S&P BB rating (not bad at all). At this current yield, you will double your investment every 9 years by just re-investing your dividends each quarter. This preferred was originally issued at $25/share and 8.13% yield. As it rose in price to $26.xx the yield dropped to the current 7.7%. If you bought it at the initial $25 price you would still be getting the 8.13% yield.
For those of us who need a well balanced portfolio and are always looking for non-volatile stocks that are also tax friendly, preferred stocks are a great choice. I have allocated a portion of my core portfolio to quality preferred stocks with high-yields. In general, they don’t go up or down in price but they sure crank out their nice steady dividends.
Preferred stocks act almost like a bond. They have coupon values, fixed dividends, call or expiration dates and so forth.
You can learn more about Preferred Stocks by checking out these sites.