Stifel Financial Preferred Stock Hits 17.16% Discount

In a recent report, Stifel Financial Corporation's preferred shares are trading significantly below their liquidation preference, with a yield above 5.5%. Investors face risks as dividends are non-cumulative, impacting the stock's appeal amidst the broader financial market.

Date: 12-11-2024

AI Rating: 5

Stifel Financial Corporation's preferred stock, SF.PRD, is currently exhibiting a yield above 5.5% based on its annualized dividend of $1.125. However, this yield is less favorable compared to an average of 6.33% within the financial preferred stock category. The discrepancy may deter some investors seeking higher returns.

Furthermore, SF.PRD is trading at a notable 17.16% discount to its liquidation preference amount, starkly higher than the average discount of 5.37% in the financial sector. Such a significant discount could signal potential concerns about the company's stability or market perception, potentially influencing investor sentiment negatively.

It is crucial to highlight that the shares are classified as non-cumulative, meaning if the company misses a payment, it is not obligated to make up for those skipped dividends before common stock dividends are resumed. This characteristic tends to increase the risk associated with holding the preferred shares, making them less attractive to conservative investors who rely on consistent income.

In the trading session, SF.PRD was down approximately 1% for the day, aligning closely with the common shares (Symbol: SF), which experienced a decline of about 1.2%. These declines may suggest a broader trend in trading behavior among investors favoring liquidity over risks associated with preferred shares.

Stocks: SF