Truist Financial Corp's Preferred Shares Yield Over 6%

In a recent report, Truist Financial Corp's 5.25% Dep Shares Series O Non-Cumul Perpetual Prfd Stock shows a yield above 6%, indicating investor caution amidst a significant discount to liquidation preference, potentially affecting stock prices in the financial sector.

Date: 13-12-2024

AI Rating: 5

The report highlights that Truist Financial Corp's 5.25% Dep Shares Series O Non-Cumul Perpetual Prfd Stock (TFC.PRO) is currently yielding above 6% based on its quarterly dividend. This yield is notable considering the average yield in the Financial preferred stock category stands at 6.50%. The trading price of TFC.PRO reached as low as $21.75, which signifies a significant discount of 11.64% to its liquidation preference amount compared to the average discount of 6.93% within the same category.

This high yield, coupled with a considerable discount to its liquidation preference, suggests that investors may be cautious about potential risks associated with the stock. Also, the fact that these shares are non-cumulative implies that any missed dividend payments wouldn't be required to be paid back before common dividends can be resumed, increasing the risk for preferred shareholders.

The report mentions a trading decline of approximately 1.5% on that particular day for TFC.PRO, while the common shares of Truist (TFC) remained flat. This indicates that preferred shares are experiencing volatility and investor sentiment may be influenced by broader market conditions or company-specific concerns.

Stocks: TFC