Wells Fargo: Yields Exceeding 6% On Its Preferred Stock

The Investment DoctorInvesting Group LeaderFollow5ShareSavePlay(6min)CommentsSummaryWells Fargo Series Z preferred shares now yield over 6%, offering an attractive risk/reward profile for fixed-income investors.WFC's preferred dividends are well covered, requiring less than 5% of net income, underscoring payout safety barring extreme scenarios.Despite their non-cumulative status, the 230 bps spread over Treasuries is viewed as fair compensation for the risk profile of these securities.I maintain small long positions in both WFC common and Series Z preferred, favoring reliable, low-maintenance income over chasing maximum yield.Looking for more investing ideas like this one? Get them exclusively at European Small-Cap Ideas. Learn More » Noah Sauve/iStock Editorial via Getty Images Introduction In the portion of my portfolio that’s focusing on fixed income, I am predominantly looking for yields that exceed 6% while maintaining a healthy risk/reward ratio. I would be fine with higher yields as long as the risks are not outrageously high, andThis article was written byThe Investment Doctor23.67K FollowersFollowThe Investment Doctor is a financial writer, highlighting European small-caps with a 5-7 year investment horizon. He strongly believes a portfolio should consist of a mixture of dividend and growth stocks. He is the leader of the investment group European Small Cap Ideas which offers exclusive access to actionable research on appealing Europe-focused investment opportunities not found elsewhere. The a focus is on high-quality ideas in the small-cap space, with emphasis on capital gains and dividend income for continuous cash flow. Features include: two model portfolios - the European Small Cap Ideas portfolio and the European REIT Portfolio, weekly updates, educational content to learn more about the European investing opportunities, and an active chat room to discuss the latest developments of the portfolio holdings. Learn more.Analyst’s Disclosure: I/we have a beneficial long position in the shares of WFC.PR.Z either through stock ownership, options, or other derivatives. 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. I currently have no position in WFC's common shares, but I may write some out-of-the-money put options.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.