AGNCO - How Floating Rate Shares Could Earn Over 10%
2024-02-01 18:41:23 ET
Summary
- These fat dividends benefited from floating in one way or another. Many of them are more than 10%.
- Some shares start floating in 2024 or early 2025. Those shares aren't showing their floating yield yet, even though they will kick in soon.
- We also need to look at the change in valuations for some better companies.
Today's lesson on dividends is going to focus on the impact of floating rate shares. I'm interested in both fixed-rate and fixed-to-floating shares. Sure, there are common shares also. But I'm starting this article with the preferred shares.
For many income investors, preferred shares are a better way to use the sector. You can use fixed-rate preferred shares to lock in a pretty high yield for many years (if you get called, it's a huge capital gain). Or you can use fixed-to-floating shares to generate a much higher yield in the near future. However, this technique generally means you won't have nearly as much upside....
How Floating Rate Shares Could Earn Over 10%