WCC - Bargain Wesco Preferred Stock: More Like A High Yield 1 Year Bond
2024-06-19 11:30:00 ET
Summary
- Wesco International (WCC) is the largest player in the electrical components distribution and services sector and is very profitable.
- Wesco International Preferred “A” , ticker WCC-A, sports a “qualified” 10.34% yield and its dividend resets in 1 year to a whopping 14.6% at current rates.
- Unfortunately, with such extraordinarily high yielding characteristics, WCC-A is extremely likely to be called in 1 year, but with a very high after-tax yield-to-call (YTC).
- So WCC-A is more like a 1 year bond, but unlike bonds it pays a qualified dividend. WCC-A is currently my favorite shorter term investment in the market.
- For U.S. residents, WCC-A’s after-tax YTC is far higher than the YTM on comparable 1 year bonds –equivalent to a 9.0% bond for those in the top tax brackets.
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Bargain Wesco Preferred Stock: More Like A High Yield 1 Year Bond