Preferred Shares To Hold Forever: Crestwood And RLJ Lodging, Yields Up To 10.7%
Published Dec 14, 2020 on Seeking Alpha

Seeking AlphaDividend IdeasPreferred Shares To Hold Forever: Crestwood And RLJ Lodging, Yields Up To 10.7%Dec. 14, 2020 8:35 AM ET|| About: Crestwood Equity Partners LP 9.25% Preferred Units representing limited partner interests (CEQP.PR), RLJ.PA, Includes: ANH, ANH.PA, ANH.PB, ANH.PC, CEQP, RLJby: Rida MorwaRida Morwa High Dividend OpportunitiesThe #1 Service for Income Investors and Retirees, 9-10% dividend yield.SummarySome people collect rare art, I collect dividend streams.
One elusive investment is preferred stocks that cannot be called.
These unique investments allow us to hold the shares and collect dividends forever.
The decision to sell is in our hands, not the hands of the company.
Co-produced with Beyond Saving
Today, we highlight two preferred stocks that can never be called.
Crestwood Equity Partners preferred shares CEQP- (CEQP.PR) RLJ Lodging preferred shares RLJ-A (RLJ.PA). While it's becoming harder to find big bargains in the preferred stock space, there always are good opportunities. Both CEQP- and RLJ-A are still undervalued and offer a nice yield. These are two preferreds to buy and hold forever.
The Income Method is all about building a large and stable income stream from our investment portfolios. We value our portfolios just like we value the businesses we invest in, by their cash flow.
We have discussed before how preferred stocks can provide a lot of stability in terms of cash flow. A company cannot pay a penny of common dividends until the preferred dividend is paid in full. Also, many preferred equity investments are cumulative, meaning that in the event that the dividend is suspended, the amount owed will accumulate and will have to be paid to preferred shareholders in full before common dividends can be paid.
This makes preferred share investments a cornerstone of our high-yield strategy. While there are sometimes opportunities for capital gains, the primary goal of a preferred equity investment is for the... Read more