Enterprise Financial Services Corp Preferred Shares Yield Analysis

Analyzing the yield performance of EFSCP. Tuesday's trading shows shares yielding above 6.5%, highlighting a significant discount compared to its liquidation preference. Investors should note the non-cumulative nature of these preferred shares.

Date: 21-01-2025

AI Rating: 5

**Yield Performance and Discount Analysis**

In the report, it is stated that Enterprise Financial Services Corp's preferred shares (EFSCP) are yielding above 6.5% based on an annualized dividend of $1.25. This yield is slightly below the average yield of 6.54% in the financial preferred stock category, suggesting that investors might find EFSCP shares slightly less attractive compared to peers.

EFSCP is trading at a substantial discount of 22.80% to its liquidation preference amount, compared to the average discount of 8.28% in the financial category. This indicates potential underlying issues with the shares that investors should consider. A high discount often reflects concerns about the issuing company’s financial stability or growth prospects, which can lead to a lower stock price and yield.

It is also important to note that the preferred shares are non-cumulative. This characteristic means that if the company were to miss dividend payments, it would not be obligated to make up those missed payments before resuming dividends on common shares. This increases risk for investors in the event of financial difficulties for the company, potentially leading to decreased confidence in the stock and putting downward pressure on share prices.

In the trading session mentioned, shares of EFSCP were down about 0.8%, while the common shares (EFSC) witnessed a smaller decline of about 0.2%. This indicates a trend where preferred shares may be responding more negatively than common shares to current market conditions, which could reflect broader concerns among investors.

Stocks: EFSCP EFSC