State Street’s Preferred Stocks: High-Yield, Fixed-Income Powerhouses for Conservative Investors

In a low-yield world, income-starved investors are clamoring for secure, dividend-paying instruments. State Street Corporation (NYSE: STT) offers two compelling options: its Series G (STT.PRG) and Series K (STT.PRK) preferred stocks. These non-cumulative perpetual securities combine attractive yields, structural upside, and the backing of one of the world’s largest financial institutions. With Series G trading at an 11.5% discount to its liquidation value and Series K offering a 6.45% fixed yield, these are undervalued fixed-income opportunities that demand immediate attention.

Why State Street Preferred Stocks Stand Out

State Street’s preferred shares are engineered for income generation, backed by a fortress balance sheet. As of March 2025, the company manages $4.7 trillion in assets under management and $46.7 trillion in assets under custody/administration, operating across over 100 markets. This scale underpins its ability to sustain dividends—a critical factor for preferred stockholders.

Series G: Immediate Yield & Floating-Rate Upside

• Current Yield: 6.05% (based on a recent price of $22.12 vs. $25 liquidation value).
• Key Features:
• Fixed-to-Floating Transition: Pays 5.35% until March 2026, then shifts to a floating rate tied to 3-month LIBOR + 3.709%, offering protection against rising rates.
• Perpetual Tenor: No maturity date, with dividends paid quarterly.
• Non-Cumulative: Missed payments do not accumulate, but State Street has a strong history of dividend discipline, including a $0.76 common stock dividend declared in May 2025.

Series K: Higher Yield with Future Rate Flexibility

• Current Yield: 6.45% (fixed until September 2030).
• Key Features:
• Floating Rate Post-2030: Resets to the 5-year U.S. Treasury rate + 2.135%, ensuring returns keep pace with rising rates.
• Liquidation Preference: $1,000 per depositary share, issued at par, making it a stable anchor for conservative portfolios.
• Regulatory Flexibility: Callable after 2030, but State Street’s capital strength reduces the risk of early redemption.

Structural Advantages for Conservative Investors

1. Secure Income Stream: Both series offer quarterly dividends, providing predictable cash flow. While non-cumulative, State Street’s AA- credit rating and dividend-paying history since 2007 suggest reliability.
2. Discount to Liquidation: Series G trades at $22.12, a 11.5% discount to its $25 liquidation value—a built-in margin of safety.
3. Rate-Hedged Future: Series K’s post-2030 floating rate shields investors from inflationary pressures, while Series G’s 2026 reset offers earlier rate-linked upside.

Risks & Considerations

• Non-Cumulative Risk: Dividends are not guaranteed, though State Street’s track record is strong.
• Interest Rate Sensitivity: Post-2030, Series K’s yield will fluctuate with Treasury rates, but the +2.135% spread provides a cushion.
• Callable Redemption: State Street may redeem shares after 2030, though this is unlikely unless capital needs arise.

Act Now: Capture Yield and Growth

With the Federal Reserve expected to keep rates elevated, State Street’s preferred stocks are fixed-income stalwarts that offer:
- Immediate income: 6%+ yields in a 3.5%-yielding 10-year Treasury world.
- Rate protection: Floating mechanisms guard against inflation.
- Capital preservation: Series G’s discount and Series K’s par issuance reduce downside risk.

Conclusion: A Rare Opportunity for Yield Seekers

State Street’s Series G and K preferred stocks are high-yield, low-risk income engines in an era of scarcity. For conservative investors, these securities deliver 6%+ returns, structural rate upside, and the backing of a financial titan. With Series G trading at a discount and Series K’s floating reset looming, this is a buy signal—act now to secure these undervalued instruments before yields compress further.

Investment Recommendation:
- Buy Series G (STT.PRG) for its immediate yield and 2026 floating-rate transition.
- Add Series K (STT.PRK) for its higher fixed yield and 2030 rate-linked upside.
- Target Price: Series G at $25 (liquidation value), Series K at par ($1,000), offering 13%+ upside.

Do not miss this chance to lock in secure, high-yield income with State Street’s preferred stocks. The clock is ticking—act today.