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| BondsOnline.com: instant access to and extensive coverage of over 3.5 million stocks, bonds, indexes and other securities covering major and emerging markets and exchanges across the globe. |
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| Bonds Online |
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| 5/10/2013Market Performance |
| Municipal Bonds |
|---|
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S&P National Bond Index
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3.00% |
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S&P California Bond Index
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2.96% |
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S&P New York Bond Index
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3.13% |
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S&P National 0-5 Year Municipal Bond Index
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0.70% |
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| S&P/BGCantor US Treasury Bond |
400.09 |
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| Income Equities: |
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| Preferred Stocks |
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S&P U.S. Preferred Stock Index
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848.03 |
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S&P U.S. Preferred Stock Index (CAD)
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636.26 |
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S&P U.S. Preferred Stock Index (TR)
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1,701.05 |
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S&P U.S. Preferred Stock Index (TR) (CAD)
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1,276.26 |
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| REITs |
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S&P REIT Index
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174.07 |
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S&P REIT Index (TR)
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425.30 |
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| MLPs |
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S&P MLP Index
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2,469.58 |
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S&P MLP Index (TR)
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5,428.50 |
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See Data
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7 Stocks The Bond Market Is Telling You To Buy |
Seeking Alpha - August 22, 2011 - By Stephan Rosenman
Where can an investor find great yields these days? Not in bonds. Investors have been piling into Treasuries and investment grade corporate bonds, driving down yields in the frantic hunt for safety. High quality dividend paying stocks offer more value and, arguably, more safety.
Verizon (VZ), AT&T (T), Kimberly Clark (KMB), Procter & Gamble (PG), Kinder Morgan Partners (KMP), Philip Morris International (PM), and Altria (MO) have yields that are particularly favorable when compared to their own bonds. What better seal of approval can be offered than stocks delivering yields greater than their long term bonds.
Bond holders, in all seven companies, now must go out at least 10 years to match the yield paid by the stock. In the case of Altria and Philip Morris International, bond holders need to go out to 2038 to achieve rates greater than the common stock. No Kinder Morgan Partners (KMP) bond equals the stock's 6.94% distribution. The longest KMP bond (KMP.HS maturing in 2041) yields 5.47%. KMP's distribution is appealing, especially when compared to their 30-year bonds yielding 147 basis points below the common stock. Is it really safer to own a KMP bond maturing in 2041 at a yield that much lower than the stock?
I like to think about it this way. Bond investors are lending money to these companies at low interest rates. The companies are using that cash to generate high returns. In return for owning the stock, you receive dividends at much higher rates than the lenders. You become a bank enjoying increasing interest spreads.
These are all strong companies with a proven record of raising their dividends, in some cases for over 25 years. Whether we have a recession or not, people will still smoke, diaper their babies, make iPhone calls, and need energy. These high dividend stocks are protected and with any downturn in price, they become attractive to investors looking for yields.
Moreover, their dividends are taxed at a lower rates than the interest obtained from their bonds. In Kinder Morgan Partners' case, a large portion of their distributions are tax-deferred. Long term bonds are not risk free. Many trade at high premiums. For instance, MO.HA is priced at $140 and VZ.II is priced at $141. No longer cheap, they pose significant downside risk. While unthinkable to many investors, an upturn in long term interest rates could lead to a massive losses for these bond holders.
For the complete article.
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| Stuff to look at |
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| BondsOnline Advisor |
Income Security Recommendation January 2013 Issue.
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