Preferred stocks high yield and discounts

What happened: Dynex Capital's Series C preferred stock (DX.PRC) crossed above 9% yield territory on Tuesday, while EPR Properties' Series E preferred shares (EPR.PRE) pushed past 7% yield on Friday. Preferred stocks, often yielding up to 9.9%, are trading at discounts, with some available as low as 89 cents on the dollar.

Market impact: This narrative affects income investors and preferred stock issuers. Higher yields and discounts make preferred stocks more attractive, potentially driving increased demand and narrowing spreads. Companies like Dynex Capital and EPR Properties benefit from higher dividend yields, while investors gain from discounted prices and attractive income streams.

What to watch next: Investors should monitor the next dividend payments for DX.PRC on May 15 and EPR.PRE on May 17. Additionally, track the Federal Reserve's interest rate decisions, as changes in monetary policy can influence preferred stock yields and valuations.