Kimco Realty: Why The Preferred Stocks Offer A Better Risk/Return Than The Common
Kimco Realty's preferred stocks, particularly KIM.PR.L and KIM.PR.M, offer a more attractive risk-adjusted return compared to the common stock, with yields above 6.5% and trading below par. These preferreds benefit from strong credit metrics, including an A3 rating and high unencumbered asset coverage, supporting dividend stability. They also outperform Kimco's bonds and peer preferreds in the retail REIT sector. For income-focused investors, the preferred shares present a more secure and rewarding option in the current market.
- ▪Kimco Realty's preferred stocks KIM.PR.L and KIM.PR.M yield over 6.5% and trade below their par value.
- ▪The preferreds have investment-grade credit ratings, including an A3 rating from Moody’s.
- ▪Kimco maintains a high unencumbered asset base and strong coverage ratios, supporting dividend sustainability.
- ▪These preferred shares offer better risk-adjusted returns than both Kimco’s common stock and its corporate bonds.
- ▪The common stock yields nearly 5.6% on forward AFFO but carries higher volatility and risk than the preferreds.
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