Canadian Utilities: Creating A 10% Yield And Selling The Preferreds

2025-02-09 23:05:05 ET

Summary

• We had previously rated Canadian Utilities as a 'Hold' and bought the preferred shares in anticipation of a high reset yield.
• We sold the preferred shares after a 19% return in 6 months, as peak yields for Government of Canada 5-year bonds were reached.
• The common stock has retraced a bit, and that allowed us to create a new 10% yield using covered calls on this dividend aristocrat.

Note: All amounts are in Canadian Dollars. All security prices discussed refer to the TSX prices and not the OTC prices. US Investors cannot do covered calls on TSX listed companies. ...

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