2013 Delivered Higher Dividend Income At Lower Prices To Preferred Stock Investors

2013 was the year that preferred stock investors have been waiting for. There are now 167 investment grade preferred stocks selling for a market price below these securities' $25 par value, delivering an average 6.82 percent current yield. That's up from a mere 36 such issues providing an average current yield of 5.62 percent a year ago.

Preferred stock investing is long-term investing, taking advantage of the known inverse relationship between rates and prices over time. Buyers purchase their shares when rates are increasing and prices are falling below par. Sellers sell those shares once rates head back down and prices head back up above par, adding a capital gain to the dividend income that you receive in the meantime.

Source: Seeking Alpha

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