XOMA Royalty: Preferreds Still Offer Compelling Income Despite Call Risk

Myriam Alvarez3.22K FollowersFollow5ShareSavePlay(12min)Comment(1)SummaryXOMAO is XOMA Royalty Corporation’s 8.375% cumulative preferred. I believe the core thesis centers on their dividend durability at this point.In my view, this means that as long as XOMA keeps a healthy balance sheet and its yield remains compelling, then XOMAO looks like a viable dividend play.In that sense, XOMA added 24 assets in 2025. They continue aggregating royalty interests, corporate deals, and contracts.I also like how they’re positioning to benefit from longer term Section 174 tax attributes that could further improve XOMA’s after-tax cash over time.That’s why XOMAO remains a compelling income vehicle at its 8.3% yield that also offers some exposure to biotech.Douglas Rissing/iStock via Getty Images XOMA Royalty Corporation (XOMA) (XOMAO) accumulates financial income from royalties, milestones, and other fees. They receive those cash inflows from programs run by other biotechs or pharmaceutical firms. However, note that XOMAO is not the common stockThis article was written byMyriam Alvarez3.22K FollowersFollowMy name is Myriam Hernandez Alvarez. I received the Electronics and Telecommunication Engineering degree from the Escuela Politecnica Nacional, Quito, Ecuador, the M.Sc. degree in computer science from Ohio University, Athens, OH, USA, a graduate degree in Business Management from Universidad Andina Simon Bolivar, Quito, Ecuador, and the Ph.D. degree in computer applications from the University of Alicante, Spain.Disclosure: I collaborate professionally with Edgar Torres H, who is also an author on Seeking Alpha. Our analyses are conducted independently, and we adhere to Seeking Alpha's Shared Association Guidelines.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.