Ticker: SCE-PL, Buy below $24.
Southern California Edison is electric utility located in Southern California.
Why I Would Buy
- Yield – SCE-PL yields close to 6% at current prices.
- Cumulative – The ordinary shareholders of Edison will not receive any dividends until holders of this security are paid.
- Qualified Dividends – A rarity among preferreds, the dividends of this security are eligible for 15% tax rate.
- Discount – Selling at a 15%+ discount to par.
- Strong Issuer – Parent company is Edison International, which is a large utility holding company.
What Could Go Wrong
- Perpetual – SCE-PL is a perpetual preferred security with no mandatory call-date.
- Credit Rating – The security is rated Ba1 / BB+ by Moodys and S&P, which puts it into non investment grade ratings.
Disclosure: I am long SCE-PL, please read additional disclosures here before taking any action based on this post.