Collect Massive Steady Dividends From Preferred Stocks
- High Dividend Opportunities
- Mar 6
- 5 min read
We love the idea of "set and forget" investments—something we can buy and never worry about again. But in reality, we always check in. Whether it’s a stock portfolio, a retirement account, or even a passive ETF, human nature drives us to see how things are doing, even if we don’t plan to make changes.
That’s why a balance of investments is key. For hands-on investors—especially those focused on income—having a portion of your portfolio in low-maintenance, reliable assets can reduce stress while still delivering returns. Fixed-income investments, in particular, provide steady cash flow without the need for constant monitoring.
Today, we’re highlighting two strong income investments that you can set up, step back from, and watch as they consistently pay out—no babysitting required.
Pick 1: TDS Preferreds – Yields of up to 8.1%
Telephone and Data Systems, Inc. (TDS) is a Fortune 1000 telecommunications company providing wireless products and services to ~6 million customers nationwide. TDS is an 83% owner of UScellular (USM), America’s fourth-largest full-service wireless carrier. TDS Telecom by itself provides communications services to 1.1 million connections in 31 states through its fiber, coaxial, and copper networks, with a major focus on rural geographies.
TDS Telecom's growth highlights of 2024:
Deployed 129,000 new marketable fiber addresses, expanding to 52% of its service footprint served by fiber.
Reported a 6% YoY increase in its residential revenue, while delivering a 23% YoY increase in adj. EBITDA.
Achieved a 5% YoY increase in residential revenue per connection to $64.99.
TDS has provided 2025 guidance:
Projecting adj. EBITDA between $320 to $360 million, compared to 2024 total of $350 million.
On the capex side, TDS expects to spend between $375 - $425 million (vs. $324 million spent in 2024).
TDS spent $5 million on interest expenses in 2024 and $69 million on preferred stock dividends. The company ended FY 2024 with over $200 million in cash and cash equivalents. Overall, we see substantial coverage for the preferreds from the company’s operations and liquidity positions.
TDS preferreds pay qualified dividends, and currently, TDS-V in particular, offers an 8.1% yield and ~34% upside to par.
Pick 2: ATH Preferreds – Yields of up to 8.1%
Total annuity sales in the United States posted $432.4 billion in 2024 (up 12% YoY), its third year of record-high sales. Due to interest rates on the decline, we see a notable shift to products like registered indexed-linked and fixed indexed annuities, which provide greater investment growth potential. Experts project this shift to continue in 2025 as we may experience more rate cuts.
Athene Holding Ltd. is a wholly-owned subsidiary of Apollo Global Management, Inc. (APO), a high-growth alternative asset manager with asset management and retirement services capabilities. Athene stands tall on its own merit, being a leading retirement services company that issues, reinsures, and acquires retirement savings products, with ~$350 billion of total assets, and operations in the United States, Bermuda, Canada, and Japan. Athene is consistently ranked among the best companies in America for fixed index annuities. Athene is the largest provider of annuity products in the U.S., selling over $27 billion in the first three quarters of FY 2024, and the company has over 2 million policyholders in the country.
Athene maintains a high-quality balance sheet, rated A+ by leading credit bureaus, with $8.4 billion in cash, and $68.4 billion in total available liquidity, providing a high degree of flexibility to navigate an uncertain interest rate landscape. During the first nine months of FY 2024, Athene spent $136 million on preferred dividends, and generated $2.3 billion in net income (after the preferred dividends). This implies a massive 17x coverage for its preferreds.
Athene has five public preferreds, with two fixed rate, and three rate reset types. All of Athene’s preferreds pay qualified dividends, and are non-cumulative (as is standard for insurance firms and banks) and perpetual.
6.35% Fixed-to-Float, Non-Cumulative, Series A Redeemable Perpetual Preferred (ATH.PR.A) – Yield 6.4%
5.625% Fixed Rate, Non-Cumulative, Series B Redeemable Perpetual Preferred (ATH.PR.B) – Yield 6.8%
6.375% Rate-Reset, Non-Cumulative, Series C Redeemable Perpetual Preferred (ATH.PR.C) – Yield 6.3%
4.875% Fixed Rate, Non-Cumulative, Series D Redeemable Perpetual Preferred (ATH.PR.D) – Yield 6.8%
7.75% Rate-Reset, Non-Cumulative, Series E Redeemable Perpetual Preferred (ATH.PR.E) – Yield 7.4%
For those seeking steady fixed income, ATH-D offers a 6.8% yield and ~40% upside to par. Given the security’s low base coupon, we do not expect this to be called when it becomes eligible after the end of 2025.
Conclusion
Retirement should be marked by a relaxed lifestyle. No need to hustle and bustle around trying to keep up with others. You've spent a lifetime working, saving, and planning for this period of life. Enjoy it! Don't let market ups and downs determine how your day is going. Stop trying to compete with invisible individuals who have more, do more, or earn more – that's a waste of your time. If your portfolio meets your financial goals, then live your dream retirement. If your portfolio isn't meeting your financial goals, perhaps it's time to adjust how you invest.
At High Dividend Opportunities, we maintain a large allocation to fixed income to collect steady income without the drama associated with the markets. Preferreds from TDS and Athene provide investors with an opportunity to collect low-risk income from steady businesses. You can add these to the segment of your portfolio that does not need to be constantly babysit. Set them on the highest shelf and let them do what they do best!
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