Are you getting the best rate from your broker?
Compare your broker's rates now to find out if you can save money

Choose your broker below
Welcome to Dividend.com. Please help us personalize your experience.

Select the one that best describes you
Dividend logo

Like closed-end funds, preferred stocks are one of those relative backwaters of the investing world often overlooked by investors. This could be a good time to take a fresh look at preferred stocks.

First, it won’t hurt to give a fast explanation of this investment class, which combines elements of equity and fixed income instruments.

The ABCs of Preferred Stocks

In terms of a company’s capital structure and seniority of who gets paid if the company goes belly up, preferred shareholders stand behind bond owners (creditors get paid first), but ahead of common stock owners. Preferred stock owners also come before common owners if the company decides to pay dividends; they must be paid first.

Preferred shares also usually have a call provision, which means the issuer can repurchase the shares whenever it wishes, and they usually carry a fixed dividend, typically a percentage of the par value of the stock or a fixed amount. Sometimes the dividends float according to a benchmark rate.

To read the Full Story, Go Premium or Log In

Popular Articles

News

Caterpillar Inc Increases Dividend by 10.26%

Each day, companies across the globe announce upcoming dividend payouts. In our Dividend Payout...

News

Procter & Gamble Co Leads 35 Stocks Going Ex-Dividend This Week

There are 35 stocks going ex-dividend this week starting Monday, July 16th. For income investors...

Premium Business%20charts
News

The Market Glance for July 16: GE’s First Earnings Report After Getting Dropped From the Dow

More earnings reports from Wall Street will dominate the market this week and rising interest...