Preferred Stocks to Buy: Public Storage Series T
Dividend Yield: 6.58%
I also like both Public Storage (PSA) and its Series T preferred stock.
As a result of the financial crisis, many people lost their homes. What happens when people get evicted from a house? They downsize. That’s one reason we’ve seen apartment REIT stock prices appreciate, but that’s also why Public Storage has done so well. You can’t fit a household’s worth of stuff into an apartment, so you rent storage for all those extra-large sofas. Housing remains troubled, and with people increasingly being moved into part-time jobs or leaving the workforce, this overall secular trend is continuing.
Public Storage has 10 different series of preferred stock, but I like the Series T because it trades at $21.83, which is more than 12% below par. I don’t see any reason for this discount, and it also boosts the 5.75% dividend (at par) to 6.58% at the current price.