San Francisco, California – Investors seeking to add stability to their fixed income portfolios may find interest in Wells Fargo & Company’s preferred shares. With a focus on income, these shares provide a steady stream of dividends, making them an attractive option for income-focused investors.

One specific type of preferred shares that stands out is the “busted” preferred shares, such as Wells Fargo’s Series L preferred shares. These shares offer a reliable dividend yield, providing investors with a source of passive income. Additionally, the non-cumulative perpetual convertible nature of these shares adds to their appeal, offering investors the potential for capital gains through conversion into common shares.

Analyzing Wells Fargo’s financial performance in the first quarter of 2024 reveals a mixed picture. While the bank reported a significant increase in interest income, rising interest expenses impacted its net interest income. However, gains from trading and securities helped boost non-interest income. Despite a decrease in net income compared to the previous year, the bank’s preferred dividends remained well-covered, with a low payout ratio of just 6.6%.

Looking ahead, investors in Wells Fargo’s Series L preferred shares should not anticipate a forced conversion in the near future. With a current dividend yield of over 6.3%, these shares present an opportunity for investors seeking to lock in a stable yield. As part of a strategy to add duration to a portfolio, increasing positions in Series L preferred shares during price dips may be a prudent move for investors looking to maximize income potential.

Overall, the appeal of Wells Fargo’s “busted” preferred shares lies in their stable dividend yield, potential for capital gains through conversion, and the bank’s strong financial position. By carefully analyzing the performance of these shares and the bank’s financial results, investors can make informed decisions to enhance their fixed income portfolios.