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BCE Inc. Cumulative Redeemable First Preferred Shares Series AD (BCE.PR.D)
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Brookfield Office Properties Inc. Class AAA Preference Shares Series II (BPO.PR.I)
Q: I have owned BPO.PR.I for while,it pays a 12% dividend and I just purchased the othe a few days ago,pays a 10% dividend.My reason for buying them is of course for the yield,but they also will probaby out perform the company shares if rates drop.What's your opinion??
5i Research Answer:
We have no major concerns with these preferreds. As rates decline, preferreds 'should' perform better. But rate declines will also help common shares, especially after recent declines. Common shares can also raise their dividends. Thus, we would not automatically make the assumption that preferreds will outperform.