Message To New Users

This is a follow-up to those people who asked for the Preferred Stock & ETD Securities Spreadsheet from I Prefer Income. I hope that you have been able to open and use the Spreadsheet. I update it daily and make it available to I Prefer Income members. This is a free membership located at: www.ipreferincome.com . Besides the spreadsheet, there is much more information on the website. Hope you visit and take advantage of the resources.

About the “I Prefer Income” Spreadsheet

The “I Prefer Income” Spreadsheet is a research tool that provides focused information on all preferred stocks and ETD (Exchange Traded Debt) securities with a par value of $25 (convertibles not included). The Spreadsheet contains basic information and financial metrics on both the preferred stock & ETD security as well as the company that issued (or is currently responsible) for the security. This information will help provide the investor with the means to rate each security for safety, price, yield and timeliness so that risk/reward can be identified before making a buy/sell decision.
The Preferred Stock & ETD Securities Spreadsheet contains over 540 securities along with the parent company that is responsible for the security. This is not a simple list of securities. It provides a large amount of financial metrics, including both GAAP and Non-GAAP earnings. Some of the metrics include: 5 years & quarters of earnings, common stock dividend payout ratios, preferred stock dividend payout ratios, cash flow ratios, interest coverage ratios, debt ratios, price to book ratios and more. It also includes other basic information such as type of security (preferred, cum & non cum, trust, ETD), industry, floating rate info, tax status, coupon rate, call date, maturity date, moody & S&P ratings, price, dividend, yield, yield to call, number of years of consecutive dividend increases (dividend diamonds), average yield of common, average dividend growth of common, 52 week high and low, date dividend is paid, X-dividend date, web address, link to quantumonline, etc.

With so much information, a filter has been added to allow the user to select up to 15 criteria to narrow the list. Example: If you use the filter to limit the list to a preferred stock with a price less than $25, and has a yield greater than 6.75%, and has been profitable every year for the last 5 years, and has a preferred dividend payout of less than .50; the results will display 41 matches in alphabetical order. Another feature: If the company uses Non-GAAP earnings such as FFO, AFFO DCF, etc., the spreadsheet uses a macro to show both EPS and the Non-GAAP earnings so you can compare the differences.

Update of $25 Par Preferred Stocks & ETD Securities

As of 2/1/2019, the I Prefer Income Spreadsheet contains the following:

• Traditional Preferred stocks, cumulative, $25 par: 259
• Traditional Preferred stocks, non-cumulative, $25 par: 128
• Trust Preferred, $25 par: 18
• ETD, $25 par: 159
• Issues with price under $25: 287
• Issues with yield greater than 7%: 220

Dividend Updates

Justin Law maintains the Dividend Champion list that was originally created by David Fish. This list tracks companies with a history of consistently increasing their dividends. The Dividend Champions list is separated into three categories based on how long companies have maintained the streak of annually increasing dividends: Champions (25 or more years), Contenders (10 to 24 years), and Challengers (5 to 9 years). Justin provides these 3 lists for free at: Drip Investing Resource Center or you can download the excel file directly at: Excel Spreadsheet
The “I Prefer Income” Spreadsheet also tracks all companies that have increased their dividends every year for 5 or more years. We have named these companies as “Dividend Diamonds” and we list the number of years these companies have increased their dividends. A Dividend Diamond is a positive metric that identifies a company as being strong enough to raise their dividend on a regular basis. There are currently 174 issues where the parent is designated as a dividend diamond.

And speaking of dividends, there are several companies from the I Prefer Income Spreadsheet that made announcements of changes in their dividends over the last week. Increases are great. Decreases may be cause for concern. Time for some research if you own the stock or are considering buying.

INCREASES

  • GATX: Raised dividend from .44 to .46
  • GLP: Raised dividend from .475 to .50
  • D: Raised dividend from .835 to .9175
  • CBSH: Raised dividend from .224 to .26
  • SCHW: Raised dividend from .13 to .17
  • GLOP Raised dividend from .53 to .55

DROPPED

  • DLNG: Lowered dividend from .25 to .0625

Spreadsheet Metrics

There are a lot of financial metrics that are located on the spreadsheet. For those who are long time income investors, you may be familiar with many of them But for others, some or all of the metrics are not something you are familiar with. I will go over a couple of the metrics in this email. I will explain other metrics with each new email.

Profit & Loss (5 Yrs / 5 Qtrs): When you look at the spreadsheet, the first columns are A&B. These cells contain Profit and Loss results for the last 5 Years and 5 Quarters for the company in the row the number are located. Example cells A8 & B8 show (5) 0 & (5) 0. This means that ABR has been profitable the last 5 years and the last 5 quarters. Now to make this a little more complex, these figures represent GAAP earnings. For some companies, GAAP earnings are not representative of their real earnings and cash flow. For many, Non-GAAP earnings are much more representative of their real earnings or cash flow. An example are REITS. These companies deal in real estate. GAAP earnings force them to deduct real estate depreciation from earnings and in many cases, it creates a loss where non exists. So REITS prefer to use FFO or AFFO as the Non-GAAP earnings metric that best describes their real earnings. If you look at column E, these cells describe the Type of earnings each company reports in. Companies that use GAAP earnings will show EPS in column E. For others that use Non-GAAP earnings, that cell may show FFO, AFFO, CAD, NII or other Non-GAAP earnings.

So when you look at cells A & B, just remember that it is show GAAP results. If you see that cell E is shown as something other than EPS, you know that the numbers in A & B are really not representative of their Non-GAAP earnings. To see those figures, just click on the number in A or B and a macro will kick in and display a pop-up that shows results for both EPS and the Non-GAAP earnings. Take time to understand this as profits are very important.

One last thing about Profit & Loss. Cell A & B have 2 numbers. The first number is the number of profitable years. The 2nd number is the number of years with losses. The ( ) around the number represents the last year. So in the case of ABR, cell A shows (5) 0. This means that ABR has been profitable 5 out of the last 5 years and the last year was profitable. If the results were 4 (1), it would mean that the company was profitable 4 out of the last 5 years and the last year reported a loss. Just remember that no matter what the company reported in cells A & B, if cell E shows a Non-GAAP type of earnings, then you need to click on cells A or b to see the pop-up to show both GAAP & Non-GAAP earnings.

How to obtain the Preferred Stock & ETD Securities Spreadsheet

There is no charge for the I Prefer Income Spreadsheet. If you have received this article by email, I have attached the current spreadsheet. You can also go to www.ipreferincome.com and subscribe for a Free Membership. Once a member, go to the Spreadsheet page where you can download the file. I update the file every day after the market closes. In addition to the Spreadsheet, the website contains a great deal of information on preferred stocks and ETD securities. Please forward this email to friends or family members who are interested in income investing. They may find it helpful.

Let me know if you have any questions.

Thanks. Rich
I Prefer Income

Using spreadsheet filter to identify top choices

Being an income investor with a preference for safety and higher yields, I had been tracking preferred stocks, ETD securities, BDC, MLPs, REITS, MREITS, and CREITS for years. I soon realized that I needed additional information to do my own quality research. What I needed was access to a database full of information and financial metrics, including GAAP and Non-GAAP metrics.

With this in mind, here is an example of a challenge many are facing and how a good data source like I Prefer Income can help.

What if you just inherited $50,000 and want to identify and invest in several securities that are reasonably safe and generate income with above average yields? You are retired and already have a portfolio of income generating stocks and bonds and have decided to invest this new money in a few preferred stocks and ETD securities to get more diversity in your income portfolio.

You have done your homework over the years and have a basic understanding of some of the important metrics that are used to identify companies that are financially healthy. Luckily, you have access to the IPI! spreadsheet of preferred stocks and ETD securities that contain a filter program that can search for and locate securities with your preferences.  Soon I open the spreadsheet, the filter and submit my criteria of:

1 Price of less than $26
2 Yield greater than 6%
3 Yield to call greater than 6%
4 Stock dividend payout ratio of less than .8
5 Preferred stock payout ratio of less than .8
6 Company must be a dividend diamond (5 or more years of consecutive dividend increases)

You have decided to search for companies where the price wasn’t too far above the call price as long as the yield was above 6% and the yield-to-call was also greater than 6%. You had learned a long time ago that yield was important, but to always know what the yield-to-call was so you would not get surprised when or if the security was called. In the current market, many preferreds and ETD securities have gone past the call date, so they could be called at any time. Thinking that the forward yield displayed today will last forever could just be wishful thinking. Hope for the best, but plan for the worst.

A couple seconds after submitting the criteria, the results were display . It showed 6 companies (gray rows) with a total of 10 securities located directly under the parent company. Those 6 companies and their 10 issued preferred stocks met all of the criteria that was required. The parent companies and issued preferreds were: BFS, ENB, INN, NGHC, SOHO and SRC.

Here is  a summary of the results as well as the full report showing a volcano of information and financial metrics in the 2nd table below.

Summary / As of 9/11/18

Full Report / as of 9/11/18

The results show 6 companies with 5 traditional preferreds, 3 non-cumulative preferreds and 2 ETD securities. The 10 issued securities have yields between 6.4% and 7.8% with yields-to-call of 6% to 8.5%. All 6 companies earn the designation of being Dividend Diamonds with ENB having the best record of 22 consecutive years of increasing dividends. All report good stock payout ratios of under .80 and preferred payout ratios of even lower.

The bottom line is that investors are wise to get as much investment advice and help from as many sources as possible. Analysts, including SA authors, provide valuable information. The more you read the more you will learn. Don’t limit yourself to just reading what others are recommending. Learn to be a fisherman so you do not have to obtain your fish from others. Find your own sources of data such as I Prefer Income and begin to “rely on yourself” to do your own research and make your own investment decisions.

First Post To Seeking Alpha

My name is Rich Hill (I Prefer Income). I am writing to introduce myself and my new website – https://www.ipreferincome.com

As my Seeking Alpha profile says; “I am retired”, but as an investor, you never really retire. There is always more to learn and investments to discover that will help you and your family reach or exceed your financial goals.

I have been reading SA articles for many years to provide myself with sound investment opportunities. Eventually, I concluded that I was leaning on SA authors’ informative articles a little more than I should. I realized that I was letting the authors do the research for me. Yes, I benefited from their work and learned a lot, but I also realized I wanted to take more control of my own investment decisions by becoming my own analyst. I wanted to “rely on myself” for doing the research that would lead to discovering sound investments that met my personal requirements.

Being an income investor with a preference for safety and higher yields, I had been tracking preferred stocks, ETD securities, BDC, MLPs, REITS, MREITS, and CREITS for years. I soon realized that I needed additional information to do quality research. Having a penchant for doing things myself, I began the process of re-programming my old excel spreadsheet program to automatically pull data in from 2 outside data sources. This provided a huge amount of financial information; but unfortunately, these resources did not have Non-GAAP information, which is key to analyzing many of these securities. That meant that I would have to scour financial statements and SEC documents to obtain these figures on my own.

Without going into the details of this massive project, the results are the website ( https://www.ipreferincome.com) and the spreadsheet program that provides information on preferred stocks and ETD securities. The spreadsheet includes all preferred stocks and ETD securities (does not includes convertibles), along with their parent or issuing company. It also includes a large amount of important financial metrics to help the investor in their research efforts. These metrics include not only GAAP, but also Non-GAAP metrics. As an example, we display both GAAP earnings and Non-GAAP earnings or cash flow. See example of EPS and AFFO earnings for AHT.

With this spreadsheet program, I am now better able to do my own research and to make sound investment decisions without getting the approval or nod from an outside SA analyst. Ok, I still read all of the articles and take their advice, but I am now a fisherman, not someone that must obtain their fish from others. (Ok, that sounds corny, but it is true). SA analysts are always using financial metrics to back up their views on a company’s financial strength. Here are some of the metrics and info we provide: Last 5 years and 5 quarter of profit & loss results, dividend stock payout ratio, preferred stock dividend payout ratio, net cash flow payout ratio, Interest coverage ratio, debt to EBITDA ratio, debt to equity ratio, price to book ratio, Moody’s and S&P credit ratings, forward yield, yield to call and dividend diamonds (companies that have consecutively increased dividends 5 or more years). One of the things I am most proud of is to identify the companies that report in Non-GAAP earnings or cash flow and to then provide that information by comparing their GAAP earning to Non-GAAP earnings.

Another important feature of our program is the use of a filter program using 15 different criteria. Since we track over 500 preferred stocks and ETD securities and the parent or issuing company, there is a lot of information to sift through. Using the filter is easy. Select the criteria of interest (lets say: Price < 25.50, Yield > 6, Yield To Call > 6.5, Pref stock payout < 1 ) and within about 3 seconds the program will kick out a list of every security that meets that list of requirements along with all of the metrics and information that we make available. Click here to see a video on how to use the filter.

I am writing to inform those with an interest in income investing that we are now opening our website and spreadsheet to the public. To view the website, go to www.ipreferincome.com . However, to have access to the spreadsheet, you will have to become a member. There is currently a 1 MONTH FREE PLAN that will allow you to download the spreadsheet to your own computer for review. (Note: If for some reason you do not wish to join at this time; but would like to view the spreadsheet program, send me an email and I will send you an email with the spreadsheet attached.) The website provides a lot of helpful information, including videos, to help the visitor and member. Additional information is in the works. If you do get a chance to download and review the spreadsheet, it would be a good idea to review the Spreadsheet Basics article or the video series located on the Info page. If you don’t, make sure to at least click on the User Guide, Filter button and yellow macro cells.

I appreciate the benefits of preferred stocks and ETD securities. They provide more safety that the common stock of their parent and offer a higher yield than can generally be found in today’s marketplace. To learn more, please visit our website and subscribe. I believe we provide important tools for all income investors interested in safety and income.

Thank you.

Rich Hill
I Prefer Income

New Spreadsheet Basics Videos on Preferred Stocks & ETD Securities

Just got finished with 3 of the I Prefer Income  Spreadsheet Basic Videos and posted them to YouTube.  This was my first try at creating, editing, reducing and uploading them to the YouTube website.  Quite a challenge.  I promise to get better.  The 3 videos are:

Spreadsheet Basics 1 – demonstrates how to download and open the IPI! Spreadsheet on Preferred Stocks & ETD Securities.

Spreadsheet Basics 2 – overview of the user guide, macros and general layout.  Very Important.

Spreadsheet Basics 3 – provides information on several important financial metrics every investor will want to know.

To view the videos, click on the name.  Once at Youtube, I recommend opening to “full view”  to get a better view of the spreadsheet and what is being described.  If you have any ideas for future videos, let me know in the comments.

Thanks,  Rich

Dividend Diamonds

Dividend Diamonds are those companies that have increased their dividends every year (consecutively) for at least 5 years. At this time (8/31/2018), there are 79 companies that have issued preferred stocks and ETD securities that have earned the Dividend Diamonds designation, including 2 that have reached 50 years. We list each company in column AK under the heading of Div Dmd. We display the number of years they have increased their dividend. Also, we display the current list of 79 companies that are in the IPI! spreadsheet in image 1 below.

Unfortunately MHLD lost the designation during this period because they cut their dividend after a very tough year.

This designation is an important metric and we feel it is important to include it in the IPI! spreadsheet. And be sure to use the filter program to include them in your search. ♦

Image 1, Dividend Diamond List – As of 8/31/2018