Dividends4Life: A Steady Yield Over 8% On A Forgotten Preferred Share

A Steady Yield Over 8% On A Forgotten Preferred Share

Posted by D4L | Saturday, September 24, 2016 | 0 comments »

This security is sliding along at relatively low prices in a sector that is heating up. The lower yield reflects investors getting an extra 8 months of call protection. It has about 11 months of call protection, solid coverage from the common equity, and the mREIT has a conservative agency portfolio. The 4.9 coverage ratio is solid. This isn't the highest in the sector, or even close to it, but there are several mortgage REITs with a coverage ratio below 4, some are even below 3 or below 2.

CYS Investments (NYSE:CYS) is a mortgage REIT. Relative to peers, it comes in at the medium size. The preferred shares get very little analysis by most investors, but they deserve some. Over the last several months, we've seen prices on almost every possible investment security move higher. The S&P 500 is soaring, common stock for mREITs is soaring, and several preferred shares are trading at higher prices than they saw on any day from 06/30/2015 to 06/30/2016. To be clear, this article is about preferred shares. A few traits of the common stock will come up, but the analysis here is entirely on CYS-A and CYS-B.

Source: Seeking Alpha

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