A New 8% High-Yield Place To Hide Out, Backed By Strong Earnings

Looking for a safe place to hide out from the market fallout? Maybe you should consider the new preferred offering from DCP Midstream LP (DCP). DCP Midstream LP, 7.95% Series C Fixed/Float Cumulative Redeemable Perpetual Preferred Units (DCP.PC) just started trading this week, and they are still under their $25.00 call value.
(Source: quantumonline.com)
DCP also issued another preferred series earlier in 2018, its series B units, DCP Midstream LP, 7.875% Series B Fixed/Float Cumulative Redeemable Perpetual Preferred Units (DCP.PB).
DCP's preferred units are rated B1 by Moody's and B by Standard & Poor's.
(Source: quantumonline.com)
Both units were trading at $24.60 on 10/10/18, barely moving, on a day when the Dow and the S&P 500 both lost more than -3%. To be fair, this was just the second day of trading for DCP.PC, but over 144,000 units did change hands. DCP.PB has drifted down ~4.5% from its post ex-dividend price over the past five weeks, but ranged from $24.50 to $24.60 on 10/10/18.
Compare that to these one-day losses for the Dow, the Russell 2000, and the S&P 500. In fact, the overwhelming majority of the preferreds that we cover were much more stable than the general market on 10/10/18. Of course, one day doesn't make a trend, but it may be that certain preferreds can offer a more stable place to hide out from market turbulence in the near future.
(Source: Schwab)
These are both cumulative shares, meaning that... Read more