Updated: September 14, 2016
Not yet familiar with preferred shares? With “common” shares paying so little, it’s time to get acquainted.
You can double your yields, and actually reduce your risk, by trading in your common shares for preferreds. I’ll explain how – and will also warn you about an overlooked pitfall you should avoid.
Most investors only consider “common” shares of stock when they look for income. These are the shares in a company you receive when you place an order with your broker.
Problem is, most dividend darlings don’t pay much on their common shares today. You’ll be hard pressed to find a dividend aristocrat with a yield above 3% or a P/E ratio below 20 – evaporating business models or not!…