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Regions Stock: Adding The High-Yielding Preferred Stock To My Portfolio (NYSE:RF)

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  Published in Stocks and Investing on Saturday, September 13th 2025 at 12:35 GMT by Seeking Alpha
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Adding a High‑Yield Preferred Stock to Your Portfolio: A Deep Dive into Regions Financial

In a recent Seeking Alpha column, the author explains how the addition of a high‑yielding preferred stock can bolster an income‑focused portfolio, using Regions Financial Corp. (RF) as a case study. Although the article is concise, it packs a surprisingly thorough analysis of both the mechanics of preferred stock and the specific attributes that make Regions’ preferred shares a compelling pick in today’s low‑rate environment. Below, we distill the key take‑aways, provide context from the author’s own commentary, and weave in supplementary information from the linked sources to give you a full picture of why Regions Financial might deserve a spot in your holdings.

1. Preferred Stock 101: Why It Matters

The article opens by laying out the basics of preferred shares—a hybrid security that sits between bonds and common stock. The author reminds readers that preferreds typically offer:

• Fixed dividend payments that are prioritized over common dividends.
• Tax advantages – most preferred dividends are treated as tax‑exempt (similar to interest).
• Lower volatility than common shares because of the dividend lock‑in.
• Call risk – the issuer can redeem at a predetermined price, potentially limiting upside.

These points help frame the subsequent discussion of Regions’ specific preferred shares (ticker: RF‑P), underscoring the balance of income security and liquidity that investors seek.

2. The Current Market Context

A key driver for the article’s thesis is the interest‑rate landscape. With the Federal Reserve hovering near 5 % and bond yields at historic lows, the author notes that investors are hunting for higher returns that are still relatively safe. Preferred shares, especially those issued by solid financial institutions, can provide yields well above the market average—often 6–8 %—while still offering a debt‑like priority in payouts.

The author references a link to Yahoo Finance (https://finance.yahoo.com/quote/RF) that confirms Regions’ current dividend yield for RF‑P sits around 8.5 %. By contrast, the average 10‑year Treasury yield is below 3 %, making RF‑P’s income output all the more attractive for income‑oriented portfolios.

3. Regions Financial: Company Snapshot

The author offers a brief but insightful background on Regions:

• Headquarters: Memphis, Tennessee.
• Core business: Retail banking, commercial banking, wealth management.
• Financial health: Strong capital ratios (CET1 > 12 %) and solid asset quality (non‑performing loans under 2 %).
• Growth prospects: Expanding footprint through acquisitions, particularly in the South‑East U.S.

The article cites the company’s 2023 annual report (link embedded in the Seeking Alpha piece) to underscore its robust return on equity and free cash flow trends. By referencing the annual report, the author demonstrates that the preferred dividend is backed by a company with healthy cash generation, reducing the risk of dividend cuts.

4. Why RF‑P Stands Out

The article highlights several features of the Regions preferred shares that differentiate them from other bank preferreds:

The higher dividend and slightly later call date give RF‑P a more favorable risk‑return profile. The author also notes that the call premium (102 %) is modest, suggesting that if Regions decides to call the shares, investors will receive a small bump on par value but also face potential reinvestment risk.

5. Risk Assessment

Every investment comes with risks, and the article does not shy away from them:

1. Credit Risk – Even though Regions boasts a solid rating, banking is inherently cyclical. A downturn could strain earnings, leading to dividend reductions.
2. Interest‑Rate Risk – Rising rates could depress the market price of preferreds, though the fixed dividend remains unaffected.
3. Liquidity Risk – Preferred shares are less liquid than common stocks. The article points to the average daily trading volume (~200k shares) (Yahoo Finance) as a barometer; while decent, it’s lower than most equities.
4. Call Risk – As mentioned, the issuer could redeem at 102 % before the call date, capping upside.

The author suggests mitigating these risks by diversifying across multiple preferred issuers and balancing them with higher‑yield, lower‑risk assets.

6. Portfolio Integration

The crux of the article is how to weave RF‑P into an existing portfolio. The author proposes a “preferred‑plus‑common” strategy:

• Allocate 10–15 % of the portfolio to preferreds for steady income.
• Hold the remaining 85–90 % in a mix of common equities for growth.
• Use preferred dividends as a buffer during market downturns.

The article links to a Portfolio Management Tool (link in the article) that allows investors to simulate the impact of adding RF‑P to a sample portfolio, showing an average yield lift of 1.2 % with minimal volatility increase.

7. Bottom Line: Is RF‑P Worth the Investment?

The author concludes that Regions’ preferred shares present a compelling blend of yield, safety, and liquidity—especially for investors seeking a higher income stream than what bonds offer, but without the full volatility of common stock. They emphasize that the credit quality and solid cash flows of Regions mitigate many of the typical risks associated with preferreds.

Key Take‑away: If you’re building a portfolio that balances growth and income, and if you’re comfortable with the modest liquidity constraints and call risk of a preferred security, adding RF‑P could deliver an annualized 8–9 % yield with a credible safety net.

Additional Resources

• Regions Financial 10‑K (FY2023) – Provides in‑depth financial metrics and risk disclosures.
• Yahoo Finance RF‑P Quote – Live market data, charts, and analyst ratings.
• Seeking Alpha RF‑P Discussion Thread – Community insights and sentiment analysis.

By combining the article’s synthesis with these supplemental materials, you’ll have a well‑rounded view of whether the high‑yielding preferred stock from Regions Financial aligns with your investment objectives.