Equitable Holdings' Preferred Stock Dividend Strategy and Its Implications for Income Investors

In a low-yield environment where traditional fixed-income instruments struggle to generate meaningful returns, income investors are increasingly turning to preferred stocks as a viable alternative. Equitable Holdings (EQH) has emerged as a compelling case study in this space, offering a diversified suite of preferred securities with yields that outpace market benchmarks while leveraging a robust financial services portfolio to underpin payout resilience. This analysis evaluates EQH's preferred stock dividend strategy, its alignment with current market dynamics, and the strategic advantages that position it as a high-conviction opportunity for yield-focused portfolios.

Preferred Stock Dividend Performance: A Cut Above the Curve

Equitable Holdings' preferred stock offerings have consistently delivered attractive yields, even as broader market conditions have constrained returns for income investors. For instance, the company's 4.30% Dep Share Fixed Rate Non-Cumulative Perpetual Preferred Stock (EQH.PRC) currently yields 6.17% based on its recent market price of $17.41, significantly exceeding the ICE BofA Fixed Rate Preferred Securities Index's yield-to-worst of 5.5% in mid-2025 Equitable Holdings Inc | 4.30% Dep Share Fix Rate Non-Cumul Perp Prfd Stock Ser C (EQH.PRC)^[3]Equitable Holdings Inc | 4.30% Dep Share Fix Rate Non-Cumul Perp Prfd Stock Ser C (EQH.PRC)^[3]. This premium is further amplified by EQH's disciplined payout history: dividends on EQH.PRC were distributed on schedule on March 4 and June 4, 2025, adhering to its quarterly payment schedule since March 15, 2021 Equitable Holdings Inc | 4.30% Dep Share Fix Rate Non-Cumul Perp Prfd Stock Ser C (EQH.PRC)^[3].

The company's Series B 4.95% Non-Cumulative Perpetual Preferred Stock also demonstrates competitive appeal, with a semi-annual dividend of $24.75 per depositary share, translating to an effective yield of 4.95% on its $25,000 liquidation preference Equitable Holdings Declares Preferred Stock Dividend^[2]. These figures underscore EQH's ability to maintain attractive yields even as the Federal Reserve's tightening cycle has pressured traditional bond markets.

Yield Stability Amid Earnings Volatility

While EQH's second-quarter 2025 adjusted non-GAAP operating earnings per share (EPS) declined 8% year-over-year to $1.41 Equitable Holdings Reports Second Quarter 2025 Results^[1], the company's preferred stock dividends remained uninterrupted. This resilience is partly attributable to its strategic reinsurance transaction with RGA, which reduced mortality exposure by 75% and generated over $2 billion in value Equitable Holdings Reports Second Quarter 2025 Results^[1]. Such operational adjustments highlight EQH's proactive approach to managing risk while preserving capital for dividend distributions.

Moreover, the company's common stock dividend trajectory—rising from $0.24 to $0.27 per share in recent quarters—reflects a disciplined payout philosophy, with a current payout ratio of 74% . While preferred dividends are non-cumulative, EQH's track record of consistent payments, even during periods of earnings contraction, suggests a strong commitment to maintaining investor confidence.

Diversified Portfolio: A Pillar of Payout Resilience

Equitable Holdings' diversified financial services portfolio, encompassing Equitable, AllianceBernstein, and Equitable Advisors, serves as a critical underpinning for its dividend strategy. The company's $1 trillion in assets under management and administration, coupled with its 5 million global client relationships, creates a stable revenue base that mitigates sector-specific risks Equitable Holdings Declares Preferred Stock Dividend^[2]. This diversification is particularly valuable in a macroeconomic environment marked by uncertainty, as alternative investments—such as real estate and private equity—have demonstrated strong projected returns over 10- to 15-year horizons Equitable Holdings Declares Preferred Stock Dividend^[2].

Furthermore, the normalization of interest rates and regulatory shifts are fueling private equity dealmaking, which could enhance asset valuations and provide additional revenue streams for EQH's portfolio Equitable Holdings Declares Preferred Stock Dividend^[2]. This strategic depth not only supports current dividend payouts but also aligns with the company's long-term financial targets, including $2 billion in annual cash generation and a 12-15% EPS growth CAGR by 2027 Equitable Holdings Reports Second Quarter 2025 Results^[1].

Risks and Considerations

Investors should remain cognizant of the inherent risks associated with preferred stocks. These instruments rank below traditional bonds in a company's capital structure and are vulnerable to price declines amid rising Treasury yields Equitable Holdings Inc | 4.30% Dep Share Fix Rate Non-Cumul Perp Prfd Stock Ser C (EQH.PRC)^[3]. Additionally, EQH's non-cumulative preferred dividends mean that unpaid dividends do not accrue, exposing investors to potential shortfalls during periods of financial stress. However, EQH's robust capital position and diversified earnings streams mitigate these risks relative to peers.

Conclusion

Equitable Holdings' preferred stock dividend strategy offers a compelling value proposition for income investors navigating a low-yield landscape. With yields that outpace market benchmarks, a history of payout consistency, and a diversified financial services portfolio to buffer against macroeconomic headwinds, EQH's preferred securities represent a strategic allocation for those seeking resilient income. While risks such as interest rate sensitivity persist, the company's proactive capital management and long-term financial targets reinforce its appeal as a high-conviction opportunity in 2025 and beyond.