Go!
Which one of these car stocks is actually a winner in the industry, offering a 9.7% yield and 50.5% year-to-date returns?

A.) Ford Motor Co. Capital Trust II Cumulative Convertible Trust Preferred (F-S)
B.) General Motors Series G Preferred (GM-G)
C.) Hilltop Holdings Preferred Series A (HTH-PA)
D.) DaimlerChrysler 7.25% Trust Preferred Stock (PYO)
E.) Mills Corp Preferred Series F (MLSFO.PK) 
Published: July 24, 2009

The correct answer is      (D.) DaimlerChrysler 7.25% Trust Preferred Stock (PYO)

It's true: you can make money in the car business. Daimler (NYSE: DAI), most known for its luxury-car brand Mercedes-Benz, is the company behind preferred shares that are reaping tidy profits and steady income for investors. Despite being in a vulnerable industry of late, the company's cost-savings measures have helped it raise $2.7 billion in new capital, preserve cash, and retain a relatively sound balance sheet.

Through its North American subsidiary, Daimler is also the largest heavy truck maker in the U.S. The German car maker holds a major stake in EADS, Europe's largest supplier of aerospace and defense services, which owns Boeing rival Airbus. Daimler gets about half of its sales in Europe.

Formerly known as DaimlerChrysler, the company changed its name to Daimler in 2007, when it sold its controlling interests in Chrysler to a subsidiary of private equity firm Cerberus. Daimler assumed DaimlerChrysler's debt, including the trust preferred stock. As "third-party" trust preferred stock, Merrill Lynch (now part of Bank of America, NYSE: BAC) packaged and issued shares of PYO, but Daimler is responsible for interest and principal payments on the underlying bond.

Those interest payments totaling $1.8125 annually give the stock a yield of 9.7% at today's share price ($1.8125/$18.66). Payments are made twice a year and are taxed as interest income, so PYO is best held in a tax-deferred account. Moody's and Standard & Poor's give the securities investment-grade "A3" and "A-" ratings, indicating that payments and principal are considered highly secure. The notes can be called after July 18, 2009, for $25 a piece and mature in 2031.

PYO is a fine example of how foreign markets can offer exceptional yields, reliable income, and share price appreciation—if you know where to look. With that in mind, StreetAuthority editor Carla Pasternak scoured the globe to find ten amazing securities with average yields of 12% that also delivered better than 21% in shareholder returns year-to-date. Carla profiles her picks—several of which have higher yields and returns that PYO!— in the latest issue of the High-Yield International newsletter. To see Carla's picks, and to learn more about High-Yield International, please visit this link.

Want to answer more trivia questions? Visit our archives here!



The Hidden "Wholesale" Market Where Gold Sells for $387/oz
Traditionally this type of gold investment sells at a lofty premium to gold bullion. But right now it's on sale for -67% cheaper. Market distortions like this never last. When this gold investment snaps back in line with bullion, owners could make a lot of money in a hurry. Details here.
 
FREE six times a week, our newsletter contains actionable investment ideas from today's leading market analysts.



  • Krispy Kreme Is Back
  • The Ten Greatest Labor Strikes in American History
  • Closing Prop-Trading, Fiduciary Neglect (JPM, GS, BAC, C, MS)
  • Visit 247WallSt.com

    The Next 433 Banks That Could Fail

    There are 7,932 banks in the United States -- and 433 are in immediate danger of failing.

    If you have cash in any of these banks your savings could be at risk.

    Meet the Experts    Newsletters    Special Offers    Email Preferences    FAQ
    About Us    Advertise    Privacy    Disclaimer    Help    Terms of Use


    TopStockAnalysts button StreetAuthority button Dividend Opportunities button

    (c) Copyright 2001-2010 TopStockAnalysts.com -- All Rights Reserved