Lee Eugene Munson and Lorraine Ell analyze Citigroup Preferred stock. Published on Seeking Alpha

As active conservative money managers, we at Portfolio Asset Management sought a way to capture appreciation from devastated financial stocks and yet have an increased chance of dependable high yields. With a focus on cash flow, an outgrowth of the demographics of our core retired investor, we began buying financial preferred stock this summer.

The common stock of large financial firms dropped dramatically in 2008. The environment of deleveraging and uncertain future earnings, not to mention the continuing risk of bank failure, tempers the allure of buying into this market plunge. Swapping common stock for debt that trades on an exchange with a daily quote versus the problematic bond pricing systems, makes financial preferred stocks a viable alternative-but not just any preferreds.
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Tags: Bear Sterns, C, C-P, C-PP, capital appreciation, cash flow, Citigroup, conservative, financials, high yield, income, Lehman, Portfolio Asset Management, preferred stock, retired