Preferred stock for natural gas

For those of you who are not familiar with preferred shares, they are like a  mix of a stock and a bond. The share price can fluctuate but is typically not as volatile as the price of common stock. Still got confused? Well, let's put that way. Buying common stocks, you are the owner of the company; as such you can enjoy the growth of the company via dividends and stock capital gains. But if you buy bonds or preferred stocks of a company, you the lending the money (lender) to the company; as such you are not interested in whether the company is doing good or bad, which is nothing to do with you. You are only interested in getting the money back plus interests. So the company is legally bound to pay you the agreed interests as priority if you buy their bonds or preferred stocks (PS). Even better, if a company skip their interest payment due to whatever reasons, it must pay back the missed amount when it resume its payment later. So when you buy PS, don't expect to see too much price appreciation but you can usually enjoy a much higher interests from it. Your aim is to get income from it. Since PS usually don't fluctuate much in price (but it will still change to a much smaller extent), adding some PS in your portfolio may help reduce the volatility of your overall portfolio. PS is usually issued at a price of $25 per share. Since it is traded also in the open market, it can still move around this price. Of course, it is better to buy below $25 if you are lucky.

So nowadays what is the good place to buy PS? Oil and Gas companies! US is undergoing a revolutionary breakthrough in this field. It has drastically reduced reliance in foreign oil and is in the process to export natural gas. It is expected that the US may become oil/gas independent completely within the next 10 years or so and may even become a major oil/gas exporter! This is a huge long term megatrend, which you don't want to miss! Anyway, the PS I'm talking about today is Goodrich Petroleum Series D Cumulative Preferred Stock (NYSE: GDP-D). The yield is 9.75%, $0.609375 per share on a quarterly basis.

Similar to bonds, companies can redeem the preferred shares at a set price on a certain date.  For this preferred stock, the company can redeem them at $25 per share on August 19, 2018. In other words,
you should be able to enjoy approximately10% annual income for at least 5 years. Even better, the D shares are currently trading just below the $25 price. So you will get a bit more if the shares are redeemed at $25.

Please note, that various brokers and websites list preferred ticker symbols differently. For example, Etrade lists it as GDP.PR.D and it is currently trading at $24.96.