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Tennessee Valley Authority Q2 2024 Revenue $5.919B Down From $5.974B YoY

Saudi Arabia and Russia announced Tuesday an extension of crude oil production cuts until December, sending shockwaves <a href="https://www.benzinga.com/markets/commodities">through the energy market. </a>
The move, which came on a longer time frame than initially anticipated by market participants, is set to have a profound impact on oil prices and related stocks.
Saudi Arabia will continue its voluntary 1 million barrels per day (bpd) crude oil production cut through the end of this year. This decision, announced via the official Saudi Press Agency, comes after Riyadh first enacted the 1 million bpd reduction in July and subsequently extended it on a monthly basis. 
With this extension, Saudi Arabia&#8217;s targeted crude oil production for the rest of the year will remain at 9 million bpd, subject to monthly reviews.
Simultaneously, Russia declared an extension of its 300,000 bpd oil export cuts through December. This addition further contributes to the 1.66-million-bpd reduction in voluntary crude output that some OPEC members have committed to until the end of 2024.
<h2 class="wp-block-heading">Oil Prices Skyrocket, Stocks Rally</h2>
The market response to these production cut extensions has been swift and significant. 
WTI-graded crude oil prices soared to $87 a barrel, reaching their highest level since mid-November 2022. This surge in prices solidified crude oil&#8217;s momentum, with a remarkable 30% increase registered since the end of June 2023, firmly establishing a bull market phase.
Adding to the bullish sentiment, the highly monitored 50-day and 200-day moving averages for crude prices recently converged, forming a golden cross, a technical signal often associated with further upward potential.
<h2 class="wp-block-heading">WTI Oil Price Daily Chart: Crude Posts Golden Cross, 8 Consecutive Positive Sessions</h2>
<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="769" src="https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/09/05101546/CL1_2023-09-05_16-15-31_1ab40-1024x769.png" alt="" class="wp-image-100943" srcset="https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/09/05101546/CL1_2023-09-05_16-15-31_1ab40-1024x769.png 1024w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/09/05101546/CL1_2023-09-05_16-15-31_1ab40-300x225.png 300w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/09/05101546/CL1_2023-09-05_16-15-31_1ab40-768x577.png 768w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/09/05101546/CL1_2023-09-05_16-15-31_1ab40.png 1438w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
Notably, U.S. oil stocks and oil-related exchange-traded funds are capitalizing on the surging crude prices. 
The Energy Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLE#NYSE">XLE</a>) experienced a 1% rise on Tuesday, outperforming all other sectors in the S&amp;P 500. Additionally, the SPDR S&amp;P Oil &amp; Gas Exploration and Production (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XOP#NYSE">XOP</a>) showed a 0.5% increase, while the VanEck Oil Services ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/OIH#NYSE">OIH</a>) surged by 2.2%.
The best-performing U.S. large-cap oil stocks Tuesday include Occidental Petroleum Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/OXY#NYSE">OXY</a>), which rose by 2.2%; and EOG Resources, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/EOG#NYSE">EOG</a>) and Exxon Mobil Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XOM#NYSE">XOM</a>), both of which experienced a 1.9% increase.
<h2 class="wp-block-heading">U.S Oil Stocks With The Largest Upside Potential</h2>
The following oil stocks presently have the most potential upside, as measured by the percentage difference between the median analyst target and market prices:
<ol>
<li>HighPeak Energy, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HPK#NYSE">HPK</a>) with a 65% unfilled gap. </li>
<li>Alliance Resource Partners, L.P. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/ARLP#NYSE">ARLP</a>) with a 51% unfilled gap.</li>
<li>Tamarack Valley Energy Ltd. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/TVE#NYSE">TVE</a>) with a 43% unfilled gap.</li>
</ol>
Read now: <a href="https://www.benzinga.com/best-sp-500-etfs">Best S&amp;P 500 ETFs</a>
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CORRECTION: Tennessee Valley Authority FY23 Operating Revenue $3.015B Vs $2.583B YoY

Tennessee Valley Authority FY23 Operating Revenue $3.015B Vs $2.583B YoY

Key Points
<ul>
<li>Power sales were up&nbsp;3%&nbsp;due in part to demand growth in the region.</li>
<li>TVA kept base power rates flat for the 3rd consecutive year in 2022, and returned&nbsp;$228 million&nbsp;in pandemic credits to customers, helping keep power rates low.</li>
<li>TVA&#39;s diversified power system continued to keep customer rates low despite higher fuel prices, with&nbsp;52%&nbsp;of TVA&#39;s power supply coming from nuclear, hydroelectric and renewables.</li>
<li>TVA reduced debt for the 6th consecutive year, with debt at the lowest level in 35 years.</li>
</ul>
KNOXVILLE, Tenn.,&nbsp;Nov. 15, 2022&nbsp;/PRNewswire/ -- The Tennessee Valley Authority reported&nbsp;$12.5 billion&nbsp;in total operating revenues on 163 billion kilowatt-hours of electricity sales for the year ended&nbsp;September 30, 2022, the first time TVA&#39;s annual revenue exceeded the&nbsp;$12 billion&nbsp;level.&nbsp; Total operating revenues increased&nbsp;19%&nbsp;over the same period last year, primarily due to an increase in fuel cost recovery revenue driven by higher fuel and purchased power market rates.
<a href="https://mma.prnewswire.com/media/326461/tennessee_valley_authority_logo.html" target="_blank"><img alt="Tennessee Valley Authority. (PRNewsFoto/Tennessee Valley Authority) (PRNewsfoto/Tennessee Valley Authority)" src="https://mma.prnewswire.com/media/326461/tennessee_valley_authority_logo.jpg" /></a>
Sales of electricity increased approximately&nbsp;3%&nbsp;compared to the prior year, driven by economic growth in TVA&#39;s service area and weather. &nbsp;Weather conditions were closer to normal for 2022 despite extreme temperatures in the summer that set several power demand records.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&quot;TVA, in partnership with our local power company customers, accomplished many things in 2022, including maintaining industry-leading reliability during challenging conditions this summer while keeping energy costs among the lowest in the nation,&quot; said&nbsp;Jeff Lyash, TVA president and CEO.&nbsp;
&quot;This was our third year holding base rates flat despite growing inflation pressures, and we will continue that stable trend into a fourth year in 2023,&quot; said Lyash.&nbsp; &quot;In addition, TVA&#39;s continuing financial strength and stability allows us to return hundreds of millions of dollars in rate credits back to our customers to support local communities.&quot;
Fuel and purchased power expense was&nbsp;$1.8 billion&nbsp;higher, driven primarily by higher fuel and purchased power prices.&nbsp; Lower nuclear output due to the extended outage for the Watts Bar Unit 2 steam generator replacement project, as well as fewer significant rain events that lowered hydroelectric generation, also contributed to higher fuel and purchased power expense.&nbsp; While the average price of natural gas was almost&nbsp;90%&nbsp;higher in 2022 as compared to 2021, TVA actively hedges much of the fuel that it uses, and more than half of TVA&#39;s power supply comes from carbon-free sources like nuclear, hydroelectric, and other renewables, which are not exposed to swings in fuel prices.
&quot;TVA&#39;s diverse generation system and proactive fuel purchasing practices translate into electricity rates in the areas served by TVA and our local power company partners that are among the lowest in the nation,&quot; said TVA&#39;s Chief Financial and Strategy Officer&nbsp;John Thomas. &quot;While natural gas prices nearly doubled over the past year, the effective rate paid by TVA customers was only&nbsp;15%&nbsp;higher.&quot;
Operating and maintenance expense increased by&nbsp;$96 million&nbsp;driven by labor escalation, information technology investments, additional inventory reserves and write-offs, an increase in natural gas, hydroelectric, and coal maintenance projects, and an increase in nuclear outage days.&nbsp; Depreciation and amortization expense increased&nbsp;$521 million&nbsp;over the prior year, primarily due to a change in depreciation rates following an updated depreciation study.&nbsp; The study included planning assumptions to potentially retire the remainder of TVA&#39;s coal-fired fleet by 2035.&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;
&quot;We understand the importance of a clean energy future, which is why TVA is executing a defined plan that we laid out in our&nbsp;<a href="https://c212.net/c/link/?t=0&amp;l=en&amp;o=3710183-1&amp;h=3390326920&amp;u=https%3A%2F%2Ftva-azr-eastus-cdn-ep-tvawcm-prd.azureedge.net%2Fcdn-tvawcma%2Fdocs%2Fdefault-source%2Fabout-tva%2Fboard-of-directors%2Fmay-6-2021%2Fstrategic-plan-documentc67079e2-d479-4f3d-a13b-1fa6fd714cde.pdf%3Fsfvrsn%3Dbc7bb2e8_7&amp;a=Strategic+Intent+and+Guiding+Principles" target="_blank">Strategic Intent and Guiding Principles</a>&nbsp;document, proactively taking a national leadership role in decarbonization,&quot; said Lyash.
&quot;Along with significant investments in our existing carbon-free generation, such as Watts Bar Unit 2 steam generator replacement this year, we issued an industry-leading request for proposals for 5,000 megawatts of carbon-free energy to be available by 2029 and signed partnerships with Ontario Power Generation and GE-Hitachi to pursue advanced nuclear technologies.&quot;
Interest expense was&nbsp;$36 million&nbsp;lower for the year ended&nbsp;Sep. 30, 2022, which was a&nbsp;3%&nbsp;decrease from the prior year due to lower average debt balances and lower average long-term rates. TVA&#39;s total debt and financing obligations decreased in 2022 to the lowest level in 35 years.
&quot;After decreasing obligations for six consecutive years, we have reduced debt by over&nbsp;$7 billion&nbsp;while simultaneously investing more than&nbsp;$17 billion&nbsp;in our power system since 2013,&quot; said Thomas. &nbsp;&quot;TVA is in its best financial condition in decades and, even with rising inflation and interest rates, electric consumers in our service area will continue to benefit from TVA&#39;s financial discipline and the significant cleaner energy investments we have made.&quot;
TVA&#39;s net income was&nbsp;$1.1 billion&nbsp;for the fiscal year 2022, which was&nbsp;$404 million&nbsp;lower than the prior year due mainly to higher operating expenses.&nbsp;
Additional highlights from TVA&#39;s fiscal year 2022 include:
<ul>
<li>Credits from the&nbsp;2.5%&nbsp;monthly base rate Pandemic Recovery Credit available to all TVA customers for 2022 totaled&nbsp;$228 million, which is money that stayed in local communities to help with recovery efforts. In August, TVA took advantage of its continued strong financial position to extend the credits for 2023, which is expected to total about&nbsp;$230 million.&nbsp;</li>
<li>As of&nbsp;November 14, 2022, 147 of 153 local power companies have entered 20-year agreements with TVA.&nbsp; Bill credits to 20-year partners totaled&nbsp;$199 million&nbsp;for the year ended&nbsp;Sep. 30, 2022.</li>
<li>TVA published its first ever&nbsp;<a href="https://c212.net/c/link/?t=0&amp;l=en&amp;o=3710183-1&amp;h=1991145407&amp;u=https%3A%2F%2Fwww.tva.com%2Fcareers%2Fdiversity-inclusion%2Fdiversity-report&amp;a=Diversity%2C+Equity%2C+Inclusion+and+Accessibility+(DEIA)" target="_blank">Diversity, Equity, Inclusion and Accessibility (DEIA)</a>&nbsp;report, which highlights TVA&#39;s progress and key programs to promote DEIA within its workforce and across the seven states it serves.</li>
<li>In May and&nbsp;June 2022, TVA experienced multiple record-setting peak and daily energy records, and the TVA power system was able to deliver energy reliably through these demands.</li>
<li>Recently released data from the U.S. Department of Energy, Energy Information Administration shows that&nbsp;Tennessee&nbsp;was the number one state for reduction of carbon intensity from 2016-2020, due in large part to TVA&#39;s coal retirements and additional nuclear and solar additions.</li>
<li>In July, TVA issued a carbon-free Request for Proposals (RFP) for up to 5,000 megawatts of carbon-free and renewable energy projects &ndash; believed to be the largest such request of its kind.</li>
<li>TVA entered an agreement with GE-Hitachi and Ontario Power Generation to support TVA&#39;s planning and preliminary licensing for a potential deployment of a small modular reactor at the Clinch River Nuclear site and provide additional information needed as TVA continues to analyze the viability of advanced nuclear technology.&nbsp; Such collaborations help reduce the financial risk that comes from development of innovative technology, as well as future deployment costs.</li>
<li>The TVA Board approved a program for up to&nbsp;$200 million&nbsp;to help develop new nuclear technologies.&nbsp;</li>
<li>Watts Bar Unit 2 returned to service in&nbsp;July 2022&nbsp;after replacing all four of its original steam generators with more efficient models that added about 20 megawatts of additional energy that will support decades of additional reliable, carbon-free generation in the Tennessee Valley.</li>
<li>Unit 3 at TVA&#39;s Browns Ferry Nuclear Plant ran for 690 consecutive days and produced more than 20 billion kilowatt-hours of carbon-free electricity prior to its scheduled refueling and maintenance outage earlier this year - enough electricity to power the average home for about 1.8 million years.</li>
<li>The 7-year,&nbsp;$326 million&nbsp;Boone Dam remediation project was completed on time and under budget.</li>
<li>TVA&#39;s economic development efforts, combined with TVA&#39;s reliable, resilient, low-cost, and cleaner energy, continue to help attract and encourage the expansion of business and industries in the Tennessee Valley, with over&nbsp;$10.2 billion&nbsp;in proposed investments and approximately 66,500 jobs expected to be created or retained in 2022.</li>
</ul>
<table border="1" cellpadding="0" cellspacing="0">
<tbody>
<tr>
<td colspan="3" rowspan="1">
Selected Financial Data &ndash; Twelve Months Ended September 30
</td>
</tr>
<tr>
<td colspan="1" rowspan="1">
Sales, Revenues &amp; Expenses
</td>
<td colspan="1" rowspan="1">
2022
</td>
<td colspan="1" rowspan="1">
2021
</td>
</tr>
<tr>
<td colspan="1" rowspan="1">
Sales (millions of kWh)
</td>
<td colspan="1" rowspan="1">
162,608
</td>
<td colspan="1" rowspan="1">
157,353
</td>
</tr>
<tr>
<td colspan="1" rowspan="1">
			&nbsp;</td>
<td colspan="1" rowspan="1">
			&nbsp;</td>
<td colspan="1" rowspan="1">
			&nbsp;</td>
</tr>
<tr>
<td colspan="1" rowspan="1">
Operating Revenues ($ millions)
</td>
<td colspan="1" rowspan="1">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 12,540
</td>
<td colspan="1" rowspan="1">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 10,503
</td>
</tr>
<tr>
<td colspan="1" rowspan="1">
			&nbsp;</td>
<td colspan="1" rowspan="1">
			&nbsp;</td>
<td colspan="1" rowspan="1">
			&nbsp;</td>
</tr>
<tr>
<td colspan="1" rowspan="1">
Fuel &amp; Purchased Power Expense
</td>
<td colspan="1" rowspan="1">
4,488
</td>
<td colspan="1" rowspan="1">
2,721
</td>
</tr>
<tr>
<td colspan="1" rowspan="1">
Operating &amp; Maintenance Expense
</td>
<td colspan="1" rowspan="1">
2,986
</td>
<td colspan="1" rowspan="1">
2,890
</td>
</tr>
<tr>
<td colspan="1" rowspan="1">
Interest Expense
</td>
<td colspan="1" rowspan="1">
1,052
</td>
<td colspan="1" rowspan="1">
1,088
</td>
</tr>
<tr>
<td colspan="1" rowspan="1">
			&nbsp;</td>
<td colspan="1" rowspan="1">
			&nbsp;</td>
<td colspan="1" rowspan="1">
			&nbsp;</td>
</tr>
<tr>
<td colspan="1" rowspan="1">
Net Income
</td>
<td colspan="1" rowspan="1">
1,108
</td>
<td colspan="1" rowspan="1">
1,512
</td>
</tr>
<tr>
<td colspan="1" rowspan="1">
			&nbsp;</td>
<td colspan="1" rowspan="1">
			&nbsp;</td>
<td colspan="1" rowspan="1">
			&nbsp;</td>
</tr>
<tr>
<td colspan="1" rowspan="1">
Net Cash Provided by / (Used in) ($ millions)
</td>
<td colspan="1" rowspan="1">
			&nbsp;</td>
<td colspan="1" rowspan="1">
			&nbsp;</td>
</tr>
<tr>
<td colspan="1" rowspan="1">
Operating Activities
</td>
<td colspan="1" rowspan="1">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2,948
</td>
<td colspan="1" rowspan="1">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3,256
</td>
</tr>
<tr>
<td colspan="1" rowspan="1">
Investing Activities
</td>
<td colspan="1" rowspan="1">
(2,663)
</td>
<td colspan="1" rowspan="1">
(2,338)
</td>
</tr>
<tr>
<td colspan="1" rowspan="1">
Financing Activities
</td>
<td colspan="1" rowspan="1">
(283)
</td>
<td colspan="1" rowspan="1">
(921)
</td>
</tr>
</tbody>
</table>
TVA&#39;s executive management team will host a conference call to discuss fiscal year 2022 results at&nbsp;9:30 a.m. ET, on&nbsp;Tuesday, Nov. 15. The event will be conducted as a webcast and as a dial-in teleconference. Participants will be able to hear the discussion and see slides via webcast, but will need telephone access to ask questions. Pre-registration for the conference call is required. Please click&nbsp;<a href="https://c212.net/c/link/?t=0&amp;l=en&amp;o=3710183-1&amp;h=2977819197&amp;u=https%3A%2F%2Fdpregister.com%2Fsreg%2F10171234%2Ff4826354a0&amp;a=here" target="_blank">here</a>&nbsp;to pre-register. Once pre-registered, the dial-in number will be provided via an email. If you are unable to pre-register, you may access the conference call by dialing toll free 844-308-6432 in&nbsp;the United States, or 412-717-9611 outside&nbsp;the United States.
A replay will be available one hour after the end of the conference call, by calling toll free 877-344-7529 in&nbsp;the United States&nbsp;or 412-317-0088 outside&nbsp;the United States&nbsp;and using the conference number 1899629. A webcast replay and transcript will also be available for one year on TVA&#39;s website at&nbsp;<a href="https://c212.net/c/link/?t=0&amp;l=en&amp;o=3710183-1&amp;h=1549672737&amp;u=http%3A%2F%2Fwww.tva.com%2Finvestors&amp;a=http%3A%2F%2Fwww.tva.com%2Finvestors" target="_blank">http://www.tva.com/investors</a>.
TVA&#39;s annual report on Form 10-K provides additional financial, operational, and descriptive information, including audited financial statements for the year ended&nbsp;Sep. 30, 2022. TVA&#39;s annual report and other SEC reports are available without charge on TVA&#39;s website at&nbsp;<a href="https://c212.net/c/link/?t=0&amp;l=en&amp;o=3710183-1&amp;h=1549672737&amp;u=http%3A%2F%2Fwww.tva.com%2Finvestors&amp;a=http%3A%2F%2Fwww.tva.com%2Finvestors" target="_blank">http://www.tva.com/investors</a>, on the SEC&#39;s website at&nbsp;<a href="https://c212.net/c/link/?t=0&amp;l=en&amp;o=3710183-1&amp;h=1012244249&amp;u=http%3A%2F%2Fwww.sec.gov%2F&amp;a=http%3A%2F%2Fwww.sec.gov" target="_blank">http://www.sec.gov</a>, or by calling TVA toll free at 888-882-4975.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
This release may contain forward-looking statements relating to future events and future performance. Although TVA believes that the assumptions underlying these statements are reasonable, numerous factors could cause actual results to differ materially from those in the forward-looking statements. Please refer to TVA&#39;s most recent annual report on Form 10-K and quarterly report on Form 10-Q for a discussion of factors that could cause actual results to differ from those in the forward-looking statements.
The Tennessee Valley Authority is a corporate agency of&nbsp;the United States&nbsp;that provides electricity for business customers and local power companies serving nearly 10 million people in parts of seven southeastern states. TVA receives no taxpayer funding, deriving virtually all of its revenues from sales of electricity. In addition to operating and investing its revenues in its electric system, TVA provides flood control, navigation and land management for the Tennessee River system, and assists local power companies and state and local governments with economic development and job creation.

TVA Reports FY22 Financial Results; Reported $12.5B In Total Operating Revenues On 163B Kilowatt-Hours Of Electricity Sales For The Year Ended September 30, 2022; Sales Of Electricity Increased Approximately 3% Compared To The Prior Year

As investors struggle selecting appropriate income streams for their portfolios, I believe that consideration should be dedicated to the under followed and under appreciated realm of inflation-protected preferred stock. 
First,a basic explanation of preferred stocks:
A preferred stock is somewhat of a hybrid security instrument, with characteristics of both stocks and bonds. The investor is promised a stated and enticing yield (or terms as per the Prospectus) in lieu of not capturing a company's growth (as with common stock) and without the same guarantees of interest and certainty of principle as bonds.In some instances, the issuer of the preferred security can defer dividend payments at their discretion. Like bonds, preferred securities usually are blessed with a rating from a recognized rating agency.
There are three dominant types of preferred securities:
Fixed-Rate Preferred Stock is the most common type of preferred stock. If dividends are deferred for "cumulative" preferred shares, the funds accumulate and must be paid to the investor unless bankruptcy occurs.
Non-Cumulative Preferred Stock is less desirable than the cumulative preferred shares. The company does not only may defer dividends, but may escape paying them altogether. In trade-off, yields on these type of shares are usually higher than on traditional preferred securities.
Trust-Preferred Stock is a hybrid preferred security essentially constructed to exploit a loophole in the U.S. tax code. Issued beginning in 2000, these shares are created by an issuing company (or a brokerage house)which places bonds issued by that company into a trust. The trust creates preferred shares that are bought by investors. This process provides certain tax advantages to the issuer. For investors,trust preferred stock is considered safer than other preferred's because dividends are paid, essentially, from interest paid to the trust by underlying bonds.Trust-preferred's generally have a certain fixed maturity date schedule.
Preferred stock issues may be treated differently for tax purposes, have a call price and feature many other qualities which are peculiar to the security. The investor absolutely MUST understand the qualities of a preferred security prior to investment. As many preferred stocks are thinly traded, the investor should always buy with a limit order. Selling some thinly traded issues could be problematic in a market free-fall.
There are approximately thirty investment-grade preferred securities with inflation protection characteristics in the market. Many of these securities offer a more handsome payout than TIPs.Buying below the call price could result in a modest capital gain if the security is redeemed. Here are a few favorites:
MetLife Preferred Series A (METpfA): $23.57/share, currently yields 4.29%. Inflation protection is 4.00% plus 1.00% over the three month LIBOR rate. Call price is $25.00 after 9/15/2010. Rated BBB-.
Prudential Financial Inflation-Linked Notes (<a class="ticker" href="/stock/pfk#">PFK</a>): $25.98/share, currently yielding 3.44% (interest paid monthly). Inflation protection is 2.40% plus the current U.S. Consumer Price Index (CPI). Matures 4/10/2018. Rated A-.
Tennessee Valley Authority Series A (<a class="ticker" href="/stock/tve#">TVE</a>): $24.75/share, currently yielding 4.55%. Inflation protection is 0.84% plus the thirty year constant maturity rate (<a class="ticker" href="/stock/cmt#">CMT</a>). Not redeemable, matures 5/1/29. Rated AAA.
U.S. Bancorp Funding Trust IV (UBSpfD):$22.11/share, currently yielding 4.06%. Inflation protection is 3.50% floor or .60% plus the three-month LIBOR rate, whichever is higher.$25.00 call price after 4/15/2011. Rated BBB+.
Note: The few ETF's (such as PFF)featuring preferred stocks that are popular with retail investors do not make my recommended list at this time, because more than a few portfolio selections are trading over their call price. When inflation kicks up, that spells trouble. 
<div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/33358029-8880412384584871831?l=investingfromtheright.blogspot.com' alt='' /></div>

Many investors are weary of the miserly interest rates at their local bank and through Uncle Sam. They want safety. They do not want to loan out money practically free. They would like inflation protection over and above what TIPS provide. 
The following select roster of securities will provide a stout yield with protection from inflation. All are rated Moody's Baa3 or higher. Most are trading at a discount from their $25.00 (or, rarely, $100.00) call price. Libor's are three month rates unless indicated differently. No caps for a maximum rate unless indicated.
This article is not to be considered a portfolio recommendation. The securities listed may be investigated for inclusion as a part of a diversified investment scheme. Most are thinly traded.
Aegeon Floating Rate(<a class="ticker" href="/stock/aeb#">AEB</a>) Libor+.875 with 4.00% floor. $20.22/share. CABCO Trust (<a class="ticker" href="/stock/gyb#">GYB</a>) Libor+.85 with 3.25% floor and 8.25% cap. $19.12/share. CABCO Trust (<a class="ticker" href="/stock/gyc#">GYC</a>) Libor+.65 with 3.25% floor and 8.00% cap. $20.62/share. Goldman Sachs Pref. A (GSPRA) Libor+.75 with a 3.75% floor. $22.15/share. Goldman Sachs Pref. C (GSPRC) Libor+.75 with a 4.00% floor. $23.98/share Goldman Sachs Pref. D (GSPRD) Libor+.67 with a 4.00% floor. $22.39/share HSBC Pref. D(HBAPRD) based upon 1-30 year T-bill basket with a 4.50% floor. 10.5% cap.$23.90/share. HSBC Pref. G (HBAPRG)Libor+.75 with a 4.00% floor.$23.39/share. HSBC Pref. F (HBAPRF) Libor+.75 with a 3.5% floor. $22.50/share Lehman Trust Cert. (<a class="ticker" href="/stock/jbk#">JBK</a>) Libor+.75 with a 3.50% floor and 7.5% cap. $19.70/share. MetLife Pref. A (METPRA) Libor+1.00 with a 4.00% floor. $23.79/share. Goldman Sachs Cap I Certificates (<a class="ticker" href="/stock/pyt#">PYT</a>)Libor+.85 with a 3.00% floor and 8.00% cap. $18.29/share. JP Morgan Floating Rate Certificates (<a class="ticker" href="/stock/pyv#">PYV</a>) 83% of CMT with a 3.00% floor and 9.25% cap. $25.40/share. Morgan Stanley Pref. Series A (MSPFA) Libor+.70 with a 4.00% floor. $21.80/share. Prudential Financial Inflation-Linked Notes (<a class="ticker" href="/stock/pfk#">PFK</a>) CPI+2.40%. $24.39/share. Santander Finance Series 6 Pref. (STDPFB) Libor+.52 with a 4.00% floor. $18.80/share. Southern California Edison Series A Pref.(SCEDN) Highest of Libor, 10-year CMT or 30-year CMT+1.45%.$99.75/share. Tennessee Valley Authority PARRS/A Power Bond (<a class="ticker" href="/stock/tve#">TVE</a>) 30-year CMT+.84%. $26.00/share. Tennessee Valley Authority PARRS/B Power Bond (<a class="ticker" href="/stock/tvc#">TVC</a>) 30-year CMT+.94%. $26.58/share. U.S. Bancorp Series B Pref. (USBPRH) Libor+.60 with a 3.5% floor.$21.86/share. UBS Pref. Trust IV (UBSPRD) 1-month Libor+.70. $16.89/share.
My favorites are PFK and SCEDN. The author has a position in PFK. 
<div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/33358029-110780097968505867?l=investingfromtheright.blogspot.com' alt='' /></div>

March 27,2010: Inflation Protected Securities. Good Insurance For The Income Investor.

With renewed interest in generating nuclear power and the high cost of setting up larger nuclear reactors, a new type small reactor by McDermott International Inc’s (NYSE: <a class="ticker" href="/stock/mdr#NYSE">MDR</a>) Babcock &amp; Wilcox subsidiary offers new hopes. Three big utilities, Tennessee Valley Authority (NYSE: <a class="ticker" href="/stock/tve#NYSE">TVE</a>), First Energy Corp. (NYSE: <a class="ticker" href="/stock/fe#NYSE">FE</a>) and Oglethorpe Power Corp. have entered into an agreement with Babcock &amp; Wilcox to get the new reactor approved for commercial use in the U.S.
This week, President Obama announced more than 8 billion in loan guarantees for the first nuclear power plant in the U.S. in almost 30 years. The President also proposed tripling the loan guarantees given to nuclear reactors to speed up nuclear energy generation. 
Small reactors which are smaller than a rail car and cost one tenth the cost of a big plant, could attract more investors as many see the massive investments in a nuclear reactor as a hindrance to enter into the business as the risk is too high if the project fails or gets delayed. Also, the fact that these small reactors have in-house waste storage capability for their lifetime i.e. a period of 60 years, and that they do not need to be near water sources as they could also be air-cooled, make them attractive for customers. Experts also believe that these small reactors should be safer than the larger ones as they are simpler and have fewer moving parts that can fail. 
Critics however say that smaller nuclear plants can never be cost effective irrespective of their size as nuclear energy is inherently expensive because of special precautions and the tight security needed at the plants.

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