BPOP Series A Preferred: A Steady Income Play in a Volatile Market

Investors seeking reliable income streams in a rising-rate environment often turn to preferred stocks, and Popular, Inc.'s (NASDAQ: BPOP) 6.375% Non-Cumulative Monthly Income Preferred Stock, Series A, stands out for its unbroken dividend history and attractive yield. With a July 31, 2025, dividend payment of $0.132813 per share already declared, this security offers income-focused investors a compelling opportunity to capitalize on consistent payouts while navigating market uncertainty.

Dividend Reliability: A Track Record of Consistency

Since at least 2023, BPOP's Series A preferred stock has maintained a monthly dividend of $0.132813 per share, with no deviations in amount or timing (see dividend schedule below). The July 2025 declaration, paired with a record date of July 15, follows the same pattern seen in prior years, reinforcing the issuer's commitment to shareholder returns.

This stability is particularly notable given the stock's non-cumulative structure, which means missed dividends are not recoverable. BPOP's flawless record—no skipped payments in over two years—suggests strong financial discipline. For income investors, this reliability contrasts with volatile common stock dividends, which BPOP increased to $0.70 per share in April 2025 but are subject to quarterly fluctuations.

Creditworthiness: A Stable Backer, Despite Modest Ratings

While BPOP's Series A preferred stock carries lower credit ratings (S&P B+, Moody's Ba3 (hyb), Fitch B+), the parent company's strong overall financial footing provides reassurance. Popular, Inc. holds an S&P BB+ rating, Moody's Ba1, and Fitch BBB-, all with stable outlooks. As Puerto Rico's largest financial institution ($66.4 billion in assets as of 2025), BPOP's diversified operations—spanning the U.S., Puerto Rico, and the British Virgin Islands—bolster its ability to weather economic cycles.

The preferred stock's ratings reflect its subordination to senior debt but align with its Tier 1 capital status for regulatory purposes. While not a top-tier investment, the stable outlook on BPOP's corporate ratings suggests the issuer is unlikely to default in the near term, making this preferred stock a middle-of-the-road risk for income seekers.

Yield Potential: A High-Payout Option in a Rising Rate World

The Series A preferred stock's 6.375% annual yield (based on a $25 par value) dwarfs BPOP's common stock dividend yield of 2.83%. This spread is amplified by the monthly payout schedule, which provides consistent cash flow—a rarity in an environment where rate hikes have slowed quarterly dividend growth.

Monthly dividends also reduce reinvestment risk, as investors can deploy cash more frequently. For retirees or income-focused accounts, this structure offers a predictable income machine with less exposure to principal volatility than common shares.

Risks and Considerations

• Non-Cumulative Risk: Should BPOP skip a dividend, shareholders forfeit the payout permanently. However, the issuer's history and stable ratings mitigate this concern.
• Credit Rating Sensitivity: While BPOP's corporate ratings are stable, further downgrades could pressure preferred stock prices. Monitor Moody's and S&P updates closely.
• Puerto Rico Exposure: As a Puerto Rican anchor, BPOP's performance ties to the island's economic recovery and fiscal policies.

Investment Takeaway

BPOP's Series A preferred stock is a high-yield, low-risk option for income investors willing to accept moderate credit risk. The $0.132813/month payout, consistent since 2023, pairs with a yield double that of the common stock, offering a defensive income play in an uncertain rate environment.

Buy if:
- You prioritize steady monthly income over capital appreciation.
- You can tolerate BB-rated exposure and non-cumulative terms.
- You believe BPOP's financial stability will endure.

Avoid if:
- You require AA-rated securities or cumulative dividends.
- You're overly sensitive to Puerto Rican economic risks.

With the next dividend on July 31, 2025, now is a strategic time to evaluate this under-the-radar income generator. For the right portfolio, BPOP Series A could be a high-yield anchor in turbulent markets.