Preferred Stocks

From this page you can start your research on Preferred Stocks. With current prices and yields you should be able to select a few that appear to meet your yield requirements and risk profile.

  • Preferred shares are shares issued by a corporation as part of its capital structure.
  • Preferred stock have a “coupon rate” — the interest rate you will be paid. This interest rate remains constant on most–but not all, preferred issues. A small number of issues have a rate that “floats,” based upon a baseline such as Libor.
  • Dividends are either cumulative — meaning that dividends continue to accrue if they have been suspended, but they are not paid until the company decides to pay them after suspension — or non-cumulative. Non Cumulative means they do not continue to accrue (they are gone forever). In either case if the dividends are suspended the company is likely in deep financial trouble.
  • Dividends are generally paid quarterly, although a few pay them monthly.
  • Preferred shares normally carry no voting rights (unlike common shares).
  • Preferred shares generally have NO maturity date (most are perpetual).
  • Most Preferred Stocks have an optional redemption period in which the shares may be redeemed, at the issuer’s option, generally five years after issuance, but may be more or less.
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Bryan Perry

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