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Retirees, You May Want To Add Preferred Stock To Your Dividend Growth Portfolio - Part II

This is an update to my article of June 2015.

DG stocks are still trading at a high valuation.

Is now the time to consider adding preferred stock to your income portfolio?

There are always opportunities to purchase preferred stocks.

Last year, I had commented about preferred stocks in some Dividend Growth articles. Some readers had asked that I write an article to help them better understand this class of investments that many were unfamiliar with. In the article Retirees, You May Want To Add Preferred Stock To Your Dividend Growth Portfolio, I tried to explain the terms in an easily understandable manner. I think the article and the comments, questions and answers are worth a read or reread now.

I have relied on the return from preferred stock for many years and I have provided a chart below to indicate the ones currently in my portfolio. I believe that Dividend Growth Investors who are looking for a higher return should consider adding preferred stock to their portfolio. I have never owned one that suspended or defaulted on its payment, except for Gastar Exploration (GST-A), which I will discuss below. Currently about 25% of my income comes from these issues. Although they are not equally weighted in my portfolio, if they were, the average return would be over 8% on a YOC basis. Many of my early purchases have increased in price. All but one is up YTD. But as the chart shows they still have a healthy payout at today's price, so I continue to hold onto them. The chart shows the month and year of purchase, the purchase price and today's price (as of 4/28/2016), and finally the YOC and the yield at today's' prices. I know some do not like YOC as a metric, and myself I like to use DOC, Dollars on Cost...


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