M&T Bank's Preferred Shares Yield Above 7% Amid Market Trends

In a recent report, M&T Bank Corp's Dep Shares 7.500% Non-Cumulative Preferred Stock, Series J were noted for yielding over 7%. The stock trades above the average yield in the Financial sector but carries risks for investors regarding missed dividends.

Date: 13-12-2024

AI Rating: 6

On Friday, M&T Bank Corp's Dep Shares 7.500% Non-Cumulative Preferred Stock, Series J (ticker: MTB.PRJ) traded with a yield exceeding 7%. The stock was changing hands as low as $26.78, presenting a notable opportunity for income-focused investors.

The reported annualized dividend of $1.875 offers a yield above the average of 6.50% for similar financial preferred stocks. Notably, MTB.PRJ was trading at a 7.28% premium to its liquidation preference amount, contrasting with the average discount of 6.93% in the Financial category. This indicates that investors are willing to pay more for this security, reflecting its perceived value and demand.

However, it's crucial to note that the shares are non-cumulative. This feature is significant for investors because, should M&T Bank miss a dividend payment, it would not be required to pay back the missed dividends to preferred shareholders before it resumes dividends to common shareholders. This aspect could introduce additional risk, as it may influence potential investors’ decisions in a market that is cautious about dividend stability.

On the trading day, MTB.PRJ saw a slight decline of about 0.1%, while the common shares of M&T Bank (Symbol: MTB) dropped about 0.9%. This downward trend in prices may cause concern among investors and could impact sentiment around the stock's prospects.

Stocks: MTB