HSBC Preferred Stock Pushes Past a 6% Yield

In trading recently, HSBC Holdings plc (ADR) (NYSE:HSBC) stock’s 6.2% Non-Cumulative Dollar Preference Shares, Series A was yielding above the 6% mark based on its quarterly dividend (annualized to $1.55), with shares changing hands as low as $25.83 on the day. This compares to an average yield of 5.69% in the “Banking & Savings” preferred stock category, according to Preferred Stock Channel.

As of last close, HSBC preferreds were trading at a 3.92% premium to its liquidation preference amount, versus the average discount of 2.39% in the “Banking & Savings” category. Investors should keep in mind that the shares are not cumulative, meaning that in the event of a missed payment, HSBC does not have to pay the balance of missed dividends to preferred shareholders before resuming a common dividend.

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The chart below shows the one-year performance of HSBC preferred stock versus HSBC common stock:

Performance Comparison Chart

Below is a dividend history chart for HSBC preferreds, showing historical dividend payments on HSBC Holdings plc (ADR)’s 6.20% Non-Cumulative Dollar Preference Shares, Series A:

HSBC.PRA+Dividend+History+Chart

In trading, HSBC Holdings plc’s 6.20% Non-Cumulative Dollar Preference Shares, Series A was recently down about 0.5% on the day, while the HSBC common shares were up about 0.7%.


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