The Top 4 Monster Yields With Massive Upside: How Buffett Made TENS OF BILLIONS

The Federal Reserve is closer to ending its rate hikes than starting them. This is important. The Fed has been raising rates to tamp down inflation. In doing so, it has created a unique situation that could set you up for an opportunity to lock in high tax-advantaged yields AND capital gains through an investment that is considered by most to be very safe. In fact, during the WORST financial crisis of our generation, the 2008 Great Recession, when financial companies were on the verge of ruin, the big banks still paid their preferred dividends even while cutting their regular dividends. That’s how secure they are.

The word “preferred” is key here because we are going to focus on four preferred stocks.

We’ll get to each in a moment, but first…

You may be asking, “What is a preferred stock?”

According to Investopedia…

A preferred stock is a class of stock that is granted certain rights that differ from common stock. Namely, preferred stock often possesses higher dividend payments, and a higher claim to assets in the event of liquidation. In addition, preferred stock can have a callable feature, which means that the issuer has the right to redeem the shares at a predetermined price and date as indicated in the prospectus. In many ways, preferred stock shares similar characteristics to bonds, and because of this are sometimes referred to as hybrid securities.

Preferred stocks are Warren Buffett’s bread and butter. After the last financial crisis, Buffett’s Berkshire Hathaway locked in massive amounts of preferred stock with Goldman Sachs and Bank of America.

These resulted in TENS OF BILLIONS of dollars in profits… and extraordinary sums in dividends.

There is a similar preferred stock opportunity playing out today in FOUR MAJOR U.S. banks.

All four have outstanding capital reserves and the highest ratings. They are among the strongest banks in the world.

They are very similar in that each one pays a quarterly dividend that receives “qualified dividend” tax treatment. This allows the dividend to be taxed at the lower capital gains rates (depending on your income) as opposed to the higher regular income tax rates. Of course, you should confirm this with your accountant or advisor, as each situation is unique.

Each one has a call provision that states that the issuer can call or buy back the shares from you after a specific date for $25 per share.

Since all of these are trading below $25, the opportunity for capital gains is very large. And the issuers cannot take the shares from you unless they are trading for $25 or more.

Each one is yielding between 5% and 6% as we go to press, giving you market-beating rates in addition to the capital gains potential. Some are paying more, and others have bigger capital gains potential.

Here are the four issues. I will give you the series and the most common symbol, but be aware that brokers use different symbols. Some have a dash, and others use “PR” after the symbol. So having the right series will solve the issue.

1. JPMorgan Series JJ (JPM-K)

This preferred stock issued by JPMorgan is currently yielding 5.6% and paying dividends quarterly. The dividend amount is $0.2843 per quarter. The shares are callable after June 2026. But the issuer has to pay you $25, which is over 20% more than what the shares are trading for today.

Action to Take: Buy the JPMorgan Series JJ (NYSE: JPM-K) preferred shares as long as the yield is above 6%. 

2. Bank of America Series LL (BAC-N)

This preferred stock issued by Bank of America is currently yielding 5.8% and paying dividends quarterly. The current dividend amount is $0.3125 per quarter. The shares are callable in September 2024 at $25, which is 20% above the current price.

Action to Take: Buy the Bank of America Series LL (NYSE: BAC-N) preferred shares as long as the yield is above 6%.

 

3. Wells Fargo Series Z (WFC-Z)

This preferred stock issued by Wells Fargo is currently yielding 6.4% and paying dividends quarterly. The current dividend is $0.2968 per quarter. The shares are callable in March 2025 at a price of $25, which is 35% above the current price.

Action to Take: Buy the Wells Fargo Series Z (NYSE: WFC-Z) preferred shares as long as the yield is above 6%.

4. Bank of America Series NN (BAC-PO) 

This preferred stock issued by Bank of America is currently yielding 5.9% and paying dividends quarterly. The current dividend amount is $0.27 per quarter. The shares are callable in November 2025 at $25, which is 35% above the current price.

Action to Take: Buy the Bank of America Series NN (NYSE: BAC-PO) preferred shares as long as the yield is above 6%.