4 High-Yield Preferred Stocks With Reasonable Risk Levels

In my last article, I took a look at five dividend paying common stocks that trade at attractive valuations. Now, I would like to add some of my top preferred stock picks for investors targeting both yield and value.As a hybrid-type investment taking the middle ground between bonds and common shares, the right preferred stock can strike a good balance for income investors.Bank of America Series L Preferred Stock (BAC-L)Like Citigroup (NYSE: C), JPMorgan Chase (NYSE: JPM), and Wells Fargo (NYSE: WFC), Bank of America (NYSE: BAC) has a wide variety of preferred stock series. While each series has its own characteristics that may make it particularly attractive to investors, my favorite series from Bank of America is the Series L shares.Currently, these shares trade at $1,145 per share; a 14.5% premium to the $1,000 liquidation value. Fortunately, these are perpetual preferred shares and the bank is not able to call the shares (except in the case of a conversion in the event Bank of America common stock trades above $65 per share) so investors are protected against the bank calling back this security. Yielding 6.3%, Series L pays an attractive dividend that stacks up well against the average 2% yield out of the market and the 1.2% from Bank of America common shares. Of course, investors in Series L give up their upside in exchange for dividends.Or do they? Bank of America Series L is actually one of the few convertible preferred stocks from a major U.S. bank trading today (the other... Read more