NCV.PR.A: A Preferred Stock with a Stable 6.5% Yield for Risk-Averse Investors

Virtus Convertible & Income Fund's (NYSE:NCV) preferred stock (NYSE:NCV.PR.A) offers a stable income with a current yield of over 6.5%. Investors looking for stable income without excessive risk may overlook preferred stocks, but NCV.PR.A is worth considering. The fund has been in operation since 03/31/2003 and provides a stable source of income for investors.

Virtus Convertible & Income Fund II (NYSE:NCZ), launched on 07/31/2003, has been a reliable source of income for investors seeking stability in their portfolios. The fund, with a total net asset value of approximately $265 million at the end of the second quarter of 2025, offers a high dividend yield and a stable income stream through its preferred stock, NCZ.PR.A.

The fund's portfolio is diversified, with 61.82% invested in Convertible Securities, 35.18% in High Yield Bonds, and the remainder in other investments and cash equivalents. The top sectors in the portfolio are Information Technology, Industrials, and Financials. NCZ's dividend yield stands at around 10.96%, with an annualized distribution rate on NAV of 10.26%. This results in a yearly dividend of $1.44, distributed monthly in the form of $0.1200 per share.

NCZ.PR.A, the preferred stock of Virtus Convertible & Income Fund II, is currently trading below its par value, offering a current yield of 6.60% and a stripped yield of 6.65%. The preferred stock is callable anytime, with a call date of 09/11/2023. It was issued on 09/04/2018, with a cumulative dividend of 5.50% per annum, translating to an annual amount of $1.38, paid quarterly at $0.34375 per share. Fitch rates the preferred stock with an "A" credit rating, indicating a stable and secure cash flow.

Investors looking for stable income without excessive risk may overlook preferred stocks, but NCZ.PR.A presents an attractive option. With a 3-year total return on NAV of 6.62% and a 5-year total return of 4.42%, the preferred stock offers a solid performance track record. Moreover, NCZ.PR.A's discount to its par value has been at its lowest point in the past decade, trading at a 6.34% discount as of July 2025.

In conclusion, Virtus Convertible & Income Fund II's preferred stock, NCZ.PR.A, provides a stable income stream with a current yield of over 6.5%. Its "A" credit rating and cumulative dividends make it an attractive option for investors seeking stable income without excessive risk. The fund's long-standing history and diversified portfolio further add to its appeal.

References:
[1] https://seekingalpha.com/article/4813469-a-rated-preferred-virtus-convertible-and-income-fund-ii