Long-term investors who ride the shares up might also consider hanging in there for the income. If Fannie were to restore the dividend on the preferred series E shares, investors would receive dividends of $2.55 a share per year, for a yield of 20.8%, based on Friday's closing price.
If Freddie were to restore the dividend on its preferred series Z shares, the annual income would be $1.34 a share, for a yield of 43.37%, based on Friday's closing price.
Please see TheStreet's previous coverage, for much more information on Fannie Mae and Freddie Mac, including:
- Why the preferred shares are a much better deal for investors than the common shares, by the numbers.
- Why some professional investors are sticking with GSE preferred shares, based on the preferred shares' superior position in the event Freddie and Freddie are wound-down or liquidated.
- Why the successful government bailout of American International Group was different from the bailout of the GSEs.
- How the DTA recapture robs one part of the U.S. Treasury to pay another.
- Possible ways forward for the U.S. housing finance market.
- Political pressure on FHFA Acting Director Edward DeMarco.
Turning away from Fannie Mae and Freddie Mac, the broad indexes all saw 1% gains, as investors appeared confident that Cyprus would be able to secure a bailout for the island nation's banks. After the Cypriot parliament rejected a "stability levy" against deposit accounts, the country's "bank holiday" continued, as officials on Friday prepared a new plan to restructure large banks and restrict deposit outflow after the country's banks reopen.The KBW Bank Index (I:BKX) rose slightly to close at 56.62. -- Written by Philip van Doorn in Jupiter, Fla. >Contact by Email. Follow @PhilipvanDoorn
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