BA BAC-PQ Bank of America Corporation Depositary Shares Series QQ Preferred Loading... : Investor Sentiment and Bull/Bear Views

The author argues BACPRQ yields 6.75% in qualified dividends while trading well below its $25 call value, offering roughly 60% upside if Fed rates fall to 2% or lower and the issue is called. He frames this as an ~11% compound annual return if the convergence takes 10 years, comparable to historical S&P 500 returns but with a top-tier bank credit rating and lower volatility. The main stated risk is that the upside depends on rates declining, which could take a long time or not happen.

The author notes BACPRQ yields 6.75% in qualified dividends with roughly 60% upside to its $25 call value, which would require Fed rates to fall to about 2% or lower for a call. Even if it took 10 years for rates to be cut and the price to return to $25, that implies roughly an 11% compound annual return, comparable to the historical S&P 500 return. The author frames this as coming from a top-tier credit rating (second-largest US bank, just below JPMorgan) with less risk and volatility than the S&P 500. Main risk is that rates stay elevated and the preferred is not called, leaving the return dependent on the dividend alone.