Corteva Splitting Up: One Preferred Keeps Its Strong Buy Rating

Retired InvestorInvesting GroupFollow5ShareSavePlay(8min)CommentsSummaryCorteva, Inc. is splitting into two companies, with preferred stocks assigned to the new Corteva entity.Both CTA.PR.A and CTA.PR.B preferreds offer yields above 6.4%, investment-grade ratings, and cumulative dividends, with low call risk due to high call prices.Despite uncertainty from the split, strong equity coverage and net income over 40x dividend requirements support a minimum Buy rating for both preferred shares. CTA-B is rated a Strong Buy, CT-A a Buy.Preferreds provide fixed-rate, non-financial sector diversification, though investors should monitor post-split capitalization and balance sheet changes.Looking for a portfolio of ideas like this one? Members of iREIT®+HOYA Capital get exclusive access to our subscriber-only portfolios. Learn More » jetcityimage/iStock Editorial via Getty Images Introduction While I really dislike investing in uncertainty, and Corteva, Inc. (CTVA) having announced they are dividing into two companies definitely qualifies. I reviewed both of its preferred stocks last fall, asThis article was written byRetired Investor9.25K FollowersFollowRetired Investor has been investing since the 1980s and has a background in data analysis and pension fund management. He writes articles to help others prepare for retirement by investing in CEFs, ETFs, BDCs, and REITs. He is a long only investor and shares strategies for trading options with a focus on cash-secured-puts. He is a contributing author to the investing group iREIT®+HOYA CapitalThe group helps investors achieve dependable monthly income, portfolio diversification, and inflation hedging. It provides investment research on REITs, ETFs, closed-end funds, preferreds, and dividend champions across asset classes. It offers income-focused portfolios targeting dividend yields up to 10%.Learn more.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. My pension will be paid by the remaining part of Corteva.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.