Voya Financial's Preferred Stock, Series B Shares Cross 5.5% Yield Mark

Voya Financial's 5.35% Fixed-Rate Reset Non-Cumulative Preferred Stock, Series B (VOYA.PRB) traded with a yield above 5.5% on Wednesday, based on its annualized dividend of $1.3375, while the average yield in the "Financial" preferred stock category is 6.66%. VOYA.PRB is trading at a smaller discount to its liquidation preference amount compared to the average in its category, though investors should note the shares are non-cumulative.

Analysis

Voya Financial Inc.'s 5.35% Fixed-Rate Reset Non-Cumulative Preferred Stock, Series B (VOYA.PRB) yielded above 5.5% on Wednesday, based on its $1.3375 annualized quarterly dividend, with shares trading as low as $24.13. This yield is notably below the 6.66% average yield for the "Financial" preferred stock category. However, VOYA.PRB was trading at a 2.56% discount to its liquidation preference amount, a significantly smaller discount than the 10.90% average for its category, potentially indicating a perception of lower risk or stronger relative valuation. A key consideration for investors is the non-cumulative nature of these shares; if Voya Financial misses a dividend payment, it is not obligated to make up these missed payments to preferred shareholders before resuming common dividends. On the trading day, VOYA.PRB shares were down approximately 0.8%, while Voya Financial's common shares (VOYA) declined by about 1.1%. The overall sentiment is neutral, with a low market impact score, suggesting the day's trading activity and these characteristics are not seen as major catalysts.

Key Decisions for Investors

• Investors should evaluate if VOYA.PRB's current yield, while above 5.5%, adequately compensates for being lower than the 6.66% average in the financial preferred sector, considering its smaller discount to liquidation preference.
• The non-cumulative feature of the dividends is a significant risk factor; potential investors must be comfortable with the possibility of permanently lost income should Voya Financial suspend payments.
• Consider the smaller discount to par (2.56% vs. sector average of 10.90%) which may imply lower capital appreciation potential to liquidation value compared to more deeply discounted peers within the financial sector.
• Monitor Voya Financial's overall creditworthiness and interest rate movements, as these factors will significantly influence the valuation and yield of these fixed-rate reset preferred shares, especially given the neutral sentiment surrounding the stock.