Tuesday, October 19, 2010

Get a 6% Yield from IBM

Let's say you are an income investor who wants to diversify into technology. You like International Business Machines (IBM) but the stock only yields 1.8%. So what's an income investor to do? Look into CorTS, which are Corporate-Backed Trust Securities. These are basically investments backed by bonds or debentures or other corporate income securities. Fortunately, there is one for IBM called Structured Products CorTS V IBM Debentures 6.40% Certificates (HZD).

The stock currently trades at a slight premium to its par value of $25, and yields 6.1%, paying 80 cents per share semi-annually. The certificates are callable beginning 9/29/2011 at par. So if you are considering buying this stock, keep in mind the call risk. The maturity date is 12/01/2096.

If you like these high yield stocks, you should take a look at How to Get a 6% Yield from Chesapeake Energy (CHK), How to Get a 4.9% Yield from Goldman Sachs (GS), and Lucent (ALU) Pays a Yield of 13%.

A list of about 20 adjustable rate preferreds, with yields ranging from 1.83% to 8.59%, is available at WallStreetNewsNetwork.com. The list includes the minimum yield, the floating rate calculation, the par value, annual income and yield.

Disclosure: Author does not own any of the above.

By Stockerblog.com

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