Summary
- Overview of Wells Fargo & Company's new preferred stock, WFC-Z.
- A brief look at the company.
- Where in the context of all securities, issued by Wells Fargo, does WFC-Z stand?
- Comparison with the sector.
- Comparison with all preferred stocks issued by a bank.
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Introduction
Since September 2019, there are 37 newly issued fixed-rate preferred stocks, 11 of which with a nominal yield of below the 5% threshold. From the low-interest rates, several banks have benefited so far such as Fifth Third Bancorp (FITB), Northern Trust (NTRS), JPMorgan Chase (JPM), Morgan Stanley (MS), and First Republic Bank (FRC). Now, it seems Wells Fargo (WFC) is taking advantage of the new environment with its new IPO, after the last preferred stock they have issued was almost 3 years ago. In this article, we want to shed light on the newest preferred stock issued by the company, WFC-Z.
The New Issue
Before we submerge into our brief analysis, here is a link to the 424B2 Filing by Wells Fargo & Co - the prospectus.
Source: SEC.gov
For a total of 70M shares issued, the total gross proceeds to the company are $1.75B. You can find some relevant information about the new preferred stock in the table below:
Source: Author's spreadsheet
Wells Fargo & Company Non-Cumulative Perpetual Class A Preferred Stock, Series Z (NYSE: WFC-Z) pays a qualified fixed dividend at a rate of 4.75%. The new preferred stock has a 'BBB-' Standard & Poor's rating and is callable as of 03/15/2025. Currently, the new issue is trading a little above par value at a price of $25.21. This translates into a 4.71% current yield and a YTC of 4.72%.
Here's how the stock's YTC curve looks right now:
Source: Author's spreadsheet
