This preferred stock is issued by an investment and insurance company.
Voya Financial, Inc. (VOYA-PB)
From Income Securities Investor
Voya Financial, Inc.; 5.35% Fixed Rate Reset (Fixed-to-Floating Rate) Perpetual; Par $25.00; Annual Fixed Rate Cash Dividend $1.3375; Current Indicated Yield 5.00%; Call Date 09/15/29; Yield to Call 4.48%; Pay Cycle 3m; Exchange NYSE; Ratings, Moody’s Ba2, S&P BBB-; CUSIP 929089209
Voya Financial, Inc. (VOYA) is a leading retirement, investment, and insurance (Closed-Block Policies) company, serving the financial needs of both individual and institutional clients in the United States. The company offers a portfolio of asset accumulation, asset protection, and asset distribution products. VOYA works directly with its clients, as well as through financial intermediaries, independent producers, affiliated advisors, and sales specialists.
VOYA’s 5.35% fixed-to-floating rate preferred (VOYA-PB) is callable on 09/15/29 at par, plus any declared and unpaid dividends, and is callable after every five-year reset date thereafter. Initial call protection is noteworthy. Starting on the initial call date and following every five-year reset period, the coupon will float at the then current five-year Treasury rate plus 3.21%. In our opinion, this is a much better structure than the fixed-to-floating rate LIBOR structures.
VOYA reported Q319 normalized adjusted operating earnings of $195.0 million or $1.36 per share, falling $0.04 short of analysts’ estimates. Normalized operating earnings were compromised by lower results in the Retirement & Individual Life business. Dividends on this preferred are qualified and taxed at the 15%-20% rate. VOYA’s senior debt ratings are investment grade. Despite this issue’s Ba2/BBB- ratings, it is suitable for low- to medium-risk taxable portfolios.
Buy up to $28.15 for an annualized 4.75% yield and a yield to call of 3.82%
Martin Fridson, CFA, Income Securities Investor, www.isinewsletter.com, 800-472-2680, December 2019