Webster Financial Corp Preferred Stock Yield Above 6.5%

Webster Financial Corp's preferred stock, WBS.PRF, yields over 6.5%, reflecting a significant discount compared to its peers. Investors should consider the implications of non-cumulative dividends as they evaluate this investment opportunity.

Date: 24-03-2025

AI Rating: 6

Preferred Stock Performance: The trading report indicates that Webster Financial Corp's 5.25% Series F Non-Cumulative Perpetual Preferred Stock (WBS.PRF) is yielding above the 6.5% mark. This yield stands relatively high compared to the average yield of 6.52% seen in the financial preferred stock category.

Additionally, WBS.PRF is trading at an 18.88% discount to its liquidation preference, which is significantly higher than the average discount of 8.52% in the same category. This might suggest that investors view the preferred stock as a riskier investment compared to its peers, perhaps due to the non-cumulative nature of the dividend payments.

When a preferred stock is non-cumulative, it means that if the company fails to make a dividend payment, it is not obligated to make up for the missed payments before any common dividends are paid. This could deter some investors who prioritize assured income from their investments.

Despite the risks associated with the non-cumulative status, the relatively high yield could be attractive to income-seeking investors. However, it's important to consider the implications of the liquidity discount and how that might affect overall valuation.

Performance of Common Shares: On the same day of trading, the common shares of Webster Financial (WBS) saw an increase of about 1.5%, indicating a potentially positive sentiment among investors towards the company's broader financial health.

Stocks: WBS