Stock Analysis & Valuation Cohen & Steers Select Preferred and Income Fund, Inc. (PSF)

• Previous Close: $20.54
• Sector Valuation Confidence Level: High

Valuation method	Value, $	Upside, %
Artificial intelligence (AI)	263.58	1183
Intrinsic value (DCF)	101.51	394
Graham-Dodd Method	12.32	-40
Graham Formula		n/a

Strategic Investment Analysis

Company Overview

Cohen & Steers Select Preferred and Income Fund, Inc. (NYSE: PSF) is a closed-end fixed income mutual fund managed by Cohen & Steers Capital Management, Inc. Launched in 2010, PSF specializes in global fixed income markets, focusing on preferred securities, hybrid-preferred securities, floating-rate preferreds, corporate debt, and convertible securities with maturities of ten years or more. The fund employs leverage up to 33.33% of managed assets to enhance returns and benchmarks its performance against indices like the BofA Merrill Lynch Fixed Rate Preferred Index and Barclays Capital U.S. Aggregate Bond Index. PSF is designed for income-seeking investors, offering exposure to high-quality preferred and debt securities while maintaining a diversified portfolio. As part of Cohen & Steers' broader suite of income-focused investment solutions, PSF benefits from the firm’s expertise in real assets and income strategies, making it a compelling option for investors looking for stable, yield-generating assets in the financial services sector.

Investment Summary

Cohen & Steers Select Preferred and Income Fund (PSF) presents an attractive option for income-focused investors, given its diversified exposure to high-quality preferred and debt securities. The fund’s use of leverage (up to 33.33%) enhances yield potential, though it also introduces additional risk. With a solid track record, a dividend yield supported by its $1.512 per share payout, and strong net income of $32.4M in the latest period, PSF is well-positioned in the fixed income space. However, investors should be mindful of interest rate sensitivity, credit risk in its holdings, and the fund’s reliance on leverage. Its low beta (0.91) suggests relative stability compared to broader equity markets, but macroeconomic shifts could impact performance.

Competitive Analysis

PSF differentiates itself through Cohen & Steers’ specialized expertise in income-generating assets, particularly preferred securities and hybrid debt instruments. The fund’s strategic use of leverage amplifies returns, though this also increases volatility and interest rate risk. Its benchmark alignment with well-regarded fixed income indices ensures disciplined portfolio construction. Compared to peers, PSF’s focus on longer-duration securities (10+ years) provides higher yield potential but may underperform in rising rate environments. The fund’s ability to invest in other funds (ETFs, closed-end funds) adds diversification but may introduce fee layering. Cohen & Steers’ strong reputation in asset management lends credibility, but PSF faces stiff competition from larger, more diversified fixed income funds with lower expense ratios. Its niche in preferred securities is a strength, but market concentration in financials (a common issuer of preferreds) could pose sector-specific risks.

Major Competitors

• Invesco Financial Preferred ETF (PGF): PGF is a passively managed ETF focusing on financial preferred securities, offering lower fees than PSF but without active management or leverage. Its broader diversification across financials reduces single-issuer risk but may lack PSF’s tactical flexibility.
• iShares Preferred and Income Securities ETF (PFF): PFF is the largest preferred securities ETF, providing liquidity and low-cost exposure. However, its passive approach lacks PSF’s active credit selection and leverage-enhanced returns, making it less dynamic in shifting markets.
• John Hancock Preferred Income Fund (HPI): HPI is another closed-end fund with a similar mandate but higher leverage (up to 38%). It competes closely with PSF in yield generation but carries greater risk due to its aggressive leverage stance.
• Nuveen Preferred & Income Opportunities Fund (JPS): JPS emphasizes opportunistic income strategies, including preferreds and corporate debt. It has a broader mandate than PSF but may take on higher credit risk, and its expense ratio is slightly elevated.