If you are an investor interested in utilities and willing to venture beyond ETFs (like XLU), you may have come across PPL Corporation.
Many income-focused investors use utilities stocks as a means of collecting income streams, without too much concern for how the price of the stock performs. If that describes you, here is an interesting dilemma. Are you better off in the common stock, junior subordinated debt, or senior unsecured bonds?
PPL Corp. has relatively slow earnings growth, and, since the financial crisis, pretty anemic dividend-growth as well. The common stock currently yields 4.80%, the 30-year senior unsecured debt, CUSIP 69352PAH6, currently yields 5.32%, and the junior subordinated exchange-traded debt, ticker PPX, yields 6.73%. If you want to learn more about PPX, you can do so here.
I am curious, as an income-focused investor, if you are interested in PPL Corp., where on the capital structure would you most want to invest?
Disclosure: After holding the common stock for roughly two-and-a-half years, I sold it on August 13 and got long PPX on September 6.