Freddie Mac, 6.02% Non-Cumulative Perpetual Preferred Stock (FMCKL)

[radiumsoup]

VLV:

I haven't looked into Fannie at all until just now... I just picked one knowing they're both roughly equivalent and I'd rather look at 20 stocks than trying to sift through 40.

I like the more recently issued variable rate ones which have a floor and no cap (some of the ones issued more than 10 years ago have caps.)

That said, if dividends are going to start back up, I believe there are provisions that require equal treatment between all preferred shares, meaning they won't start with the low interest rate prefs first. I haven't done an analysis yet to see precisely what the dividend rate of return on current prices would be, but you can generally assume the market will treat them all approximately equal right now since they should all share equally in any dividend cash to be split up among the group of preferreds. I believe, but am not certain, that Freddie can declare a partial dividend as long as all preferreds are given the same pro rata share of dividends. I know Fannie can do so, as it's explicitly stated in the $100,000 value prospectus.

Most of the Freddie prefs are $50, some are $25, and there are no other values (that $100,000 Fannie one appears to be convertible at $94 per common share - a laughable amount right now since FNMA is at $0.26). All of them are non-cumulative, unfortunately.

None of the Fannie prefs are cumulative either, it appears.