WFC, AXP: Preferred Securities

Paul Lountzis presented his in-depth investment thesis on WFC and AXP at Wide-Moat Investing Summit 2015.

PREFERRED SECURITY: WFC 6.5% SERIES Q PFD (FRAP): Depositary shares each representing a 1/1,000th Interest in a share of Series Q Non-Cumulative Perpetual Preferred Stock; issuance date: September 15, 2013; initial public offering price: $25.00 per depositary share; NYSE Symbol: WFC.Q; earliest permitted redemption date: September 15, 2023; noncumulative dividends: paid quarterly in arrears on March 15, June 15, September 15, and December 15 of each year, commencing on September 15, 2013, when, as and if declared, at a rate per annum equal to 5.85% from September 15, 2013 to, but excluding, September 15, 2023, and thereafter at a floating rate per annum equal to three-month LIBOR plus a spread of 3.09%; liquidation preference: $25 per depositary share; dividend payment: $1.46252 per share; 60 million shares outstanding; current yield: 5.73%; yield to call: 5.47%.

PREFERRED SECURITY: AXP 5.20 SERIES B PFD (FRAP): Depositary shares each representing a 1/1,000th Interest in a share of Series B Non-Cumulative Perpetual Preferred Stock; issuance date: May 15, 2015; initial public offering price: $1000 per depositary share; NYSE symbol: AXP.B; earliest permitted redemption date: November 15, 2019; noncumulative dividends: paid semi-annually in arrears on May 15, and November 15 of each year, commencing on May 15, 2015, when, as and if declared, at a rate per annum equal to 5.20% from March 15, 2015 to, and including November 15, 2019, and thereafter at a floating rate per annum equal to three-month LIBOR plus a spread of 3.428%,quarterly in arrears on February 15, May 15, August 15, and November 15, beginning on February 15, 2020; liquidation preference: $1,000 per depositary share; dividend payment: $5.20 per share; 750,000 shares outstanding; current yield: 5.239%; yield to call: 5.41%.

About the instructor:

Paul Lountzis founded Lountzis Asset Management, LLC in October 2000. He has more than 25 years of experience in the investment industry, beginning his career with Royce & Associates, a New York City-based investment advisory firm managing the Royce Mutual Funds. Paul spent nine years, with the last five as a partner at Ruane, Cunniff & Goldfarb, Inc. an investment advisory firm managing more than $9 billion including the Sequoia Mutual Fund. While at Ruane, Cunniff & Goldfarb, Inc., Paul also evaluated several companies for Warren Buffett.

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