Following a period of substantial gains in Rexford Industrial Realty's common stock, a more attractive risk-return proposition has emerged in its preferred shares. These preferred offerings provide investors with a compelling alternative, blending stability with an appealing income stream, particularly for those seeking less volatility than common equities.
Specifically, the preferred stocks, REXR.PR.B and REXR.PR.C, currently offer a yield of approximately 6.6%. Notably, they trade below their par value and boast investment-grade credit ratings, positioning them favorably against their peers when evaluated on a risk-adjusted basis. This combination of a solid yield, discounted price, and high credit quality underscores their appeal in the current market landscape. Rexford Industrial Realty's underlying financial strength, including low leverage around 30% and an impressive asset coverage of 394%, along with a robust fixed charge coverage of 5.6x, further enhances the security of these preferred investments. These strong fundamentals suggest a company well-equipped to meet its obligations, adding confidence for preferred shareholders.
Given the limited potential for further significant upside in Rexford Industrial Realty's common shares, the preferred stocks stand out as the more advantageous choice. Their attractive yield, combined with superior credit quality and favorable risk-return characteristics, makes them a compelling option for discerning investors. By focusing on these preferred shares, investors can achieve a balanced portfolio that prioritizes steady income and capital preservation over aggressive growth, aligning with a prudent investment strategy in evolving market conditions. This approach fosters a sense of financial well-being and smart capital management.