Preferred Stock Update: June 2019
Preferred stock continues to trade at yields below historical averages. Despite increases in benchmark rates by the Federal Reserve, on the whole, we continue to be in a low interest rate environment. Preferred stock is often viewed as a debt-like instrument due to its fixed dividend rate. This implies that preferred stock is valued and trades like debt, meaning increases in market interest rates may push preferred yields higher and preferred stock prices lower, and vice versa.
MPI conducted an update of its preferred stock database as of June 30, 2019, and compared general levels of interest rates to those observed on December 31, 2018. Interest rates and preferred stock yields have been low by historical standards, and may be heading lower in the coming periods. To read the full report, click here.
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