John Hancock Preferred Income Fund III (HPS): fair value, margin of safety and Wheel Score

Is HPS undervalued?

John Hancock Preferred Income Fund III (HPS) closed at 11.69 on 16 Oct 2026. The GLS average fair value - the simple average of the 9 valuation models that produced a positive number - is 20.01, which puts the price 42% below it. 7 of the 9 models value the shares above the current price. A gap this wide is rare in our universe of ~7,400 US stocks and is exactly what the Value part of the Wheel Score rewards; it is also where the question "why is it this cheap?" matters most.

There is a wide gap between DCF (0.6623) and Payback Time (41.32). When the models are this far apart the "fair value" is really a range, and the margin of safety above should be read with that range in mind.

The nightly engine files HPS under High Growth: revenue and earnings growing fast enough that the growth-based models carry the valuation.

Nine valuation models for HPS

Each model turns the latest filed numbers into a value per share; the GLS fair value is the simple average of the ones that produce a positive number. The last two rows are shown for reference and never enter the average. The Quote page lets you switch any model off and add your own margin of safety.

Quality and financial health

John Hancock Preferred Income Fund III scores 6 of 9 on the Piotroski F-score: a middling result that passes the Sunday Scan's "6 or more" rule. Some of the nine tests on profitability, leverage and efficiency are failed, so the accounts are worth a look before selling a put on the name. A GLS Moat score of 1.6/10 is a weak reading: the ten-year history the score grades (revenue, EPS, book value, margins, cash flow, share count, ROIC) has not been steady, so the Moat part of the Wheel Score contributes little.

Returns on capital are thin or negative - ROIC 2.5%, ROE 4.1%, ROA 2.5% - with debt at 0.63 times equity and a free-cash-flow yield of 9.0%.

The dividend yield is high at 11.29% (payout ratio 230%) - a payout above 100% of earnings, which is not covered by profits. A yield this size is often the market's way of pricing a risk to the payout, so the health score and cash flow matter more than usual.

Institutional ownership scores 2/10, insider activity 10/10 and Congressional trading 5/10 on the GLS smart-money scales.

Wheel Score 39: No options

No options are listed on John Hancock Preferred Income Fund III in our nightly snapshot. The Wheel Score is therefore capped at 39 (it reads 39) and the stock is left out of every options screen; the fair value and health figures above are still useful for a plain stock position.

Volume runs at 294k shares a day on a market cap of $375M, with a beta of 0.69 - a low beta, so day-to-day moves are smaller than the market's; the Stability part of the Wheel Score gives that 9 of 20.

The Wheel Score ranks ~7,400 US stocks for selling cash-secured puts and covered calls; it is updated nightly and is not a recommendation. The walkthrough lesson shows how the score fits into a trade, start to finish.

Upcoming events

No upcoming earnings date is recorded for HPS in the nightly calendar.

Earnings, dividend, IPO, split and economic calendars for the whole market, filterable to your watchlists.

Similar stocks in Asset Management - Income

The 12 companies below are the closest to John Hancock Preferred Income Fund III by market cap within the Asset Management - Income industry, each with its own fact sheet; the Compare page puts up to eight of them side by side.

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