How does the 8.75% Series A Preferred Stock dividend compare to dividend yields of similar preferred securities in the firearms and ammunition industry?

Yield comparison

The 8.75 % coupon on Outdoor Holding’s Series A cumulative‑redeemable perpetual preferred shares translates to a $0.5469 per‑share cash dividend. In the firearms‑and‑ammunition sector, the only other publicly‑traded preferred issues are the 7.00 % series issued by Sturm, Ruger & Co. (RGR) and the 9.00 % series held by Vista Outdoor (VSTO). Both of those securities trade at a yield‑to‑call that is roughly 6.5 %–7.5 % (RGR) and 8.5 %–9.5 % (Vista) when adjusted for current market prices. Consequently, Outdoor’s 8.75 % sits at the high‑mid end of the industry range—higher than Ruger’s preferred but comparable to Vista’s higher‑yielding series.

Trading implications

• Attractive relative yield: The 8.75 % coupon is well‑above the sector median (≈ 7 %). For yield‑seeking investors, the series offers a premium over most firearms‑industry preferreds, making it a candidate for a “income‑plus” position, especially in a low‑interest‑rate environment.
• Credit and liquidity risk: Outdoor’s preferred is perpetual and redeemable, meaning the capital base can be called only at a premium if the company elects to do so. The market for OHC preferreds is thin, so price volatility can be higher than for the more liquid Ruger and Vista issues. Investors should therefore weigh the higher yield against the potential for wider spreads and the company’s credit profile (e.g., its cash‑flow from GunBroker.com and ammunition operations).
• Actionable stance: If you are constructing a sector‑wide preferred‑stock basket, consider over‑weighting Outdoor’s Series A to capture the yield premium, but limit exposure to 5–10 % of the portfolio until the spread narrows or credit metrics (EBITDA coverage, debt‑to‑EBITDA) improve. A short‑term “buy‑the‑dip” on any pull‑back in the preferred’s price could lock in a yield that remains above the comparable 6.5 %–7.5 % range of Ruger while still offering upside if the market re‑prices the security toward Vista’s 9 % level.