These preferred shares are issued by a global financial company.
Equitable Holdings, Inc. (EQH-PC)
From Income Securities Investor
Equitable Holdings, Inc.; 4.30% Fixed Rate, Non-Cumulative Perpetual; Par $25.00; Annual Cash Dividend $1.075; Current Indicated Yield 4.27%; Call Date 03/15/26 at $25.00; Yield to Call 4.13%; Pay Cycle 3m
Equitable Holdings, Inc. (EQH) is a global financial services company. EQH operates through four segments: Individual Retirement, Group Retirement, Investment Management and Research, and Protection Solutions. The company offers life insurance and annuity products to individuals; retirement products and services through sponsored plans; long-term disability, dental and vision insurance to small and medium-sized businesses; and investment and wealth management products and services.
EQH’s 4.30% fixed rate preferred is callable on 03/15/26, or on any dividend payment date thereafter, at par plus any declared and unpaid dividends. Although this issue is rated non-investment grade by Moody’s, EQH’s senior debt rating is Baa2 with a positive outlook, while S&P rates EQH’s senior debt BBB+. EQH reported 2Q 2021 adjusted operating earnings of $758.0 million or $1.71 per share.
EPS results easily surpassed analysts’ $1.37 estimates. Adjusted bottom line operating results soared 68% from a year ago, benefiting from the strong economic reopening, net asset inflows of $6.1 billion, and favorable equity markets.
Assets under management (AUM) grew 22% year-over-year, reaching $869.0 billion. This investment is suitable for low- to medium-risk taxable portfolios, as EQH’s senior debt is rated Baa2/BBB+ (see preferred ratings above). Dividends are taxed at the 15%-20% rate. Buy at or below $25.85 for a 3.49% yield to call.
Martin Fridson, CFA, Income Securities Investor, isinewsletter.com, 800-472-2680, September 2021