What is a 'Preferred Stock'?

Preferred stock refers to a class of ownership that has a higher claim on assets and earnings than common stock has. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

Term of the Day | Words to Know Preferred Stock The term "stock" refers to ownership or equity in a firm. There are two types of equity - common stock and preferred stock. Preferred stockholders have a higher claim to dividends or asset distribution than common stockholders. The details of each preferred stock depend on the issue. Read More » Related to "Preferred Stock" Preferred vs. Common Stock: What's the Difference? There are many differences between preferred and common stock. The main difference is that preferred stock usually do not give shareholders voting rights, while common stock does, usually at one vote per share owned. Read More » Preference Shares: Advantages and Disadvantages Companies issue preference shares, which are commonly referred to as preferred stock, to raise capital. These shares have benefits and drawbacks for both investors and the issuing company. Read More » What are the different types of preference shares? Find out four types of preference shares – callable, cumulative, convertible and participatory - and how each benefits you differently. Read More » SPONSORED BY FIDELITY INVESTMENTS Investing in Women in More Ways Than One Hiring and retaining women is essential to making financial expertise broadly accessible. Here's why Fidelity is prioritizing women's career growth and potential. Learn More » Related Definitions Preference Shares Preference shares are company stock with dividends that are paid to shareholders before common stock dividends are paid out. Read More » Common Stock Common stock is a security that represents ownership in a corporation. Read More » Dividend A dividend is a distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders. Read More » Noncumulative Noncumulative, as opposed to cumulative, refers to a type of preferred stock that does not pay the holder any unpaid or omitted dividends. Read More » CONNECT WITH INVESTOPEDIA Email sent to: geezers.mail@gmail.com To update your newsletter preferences or unsubscribe, click here. 114 West 41st St, floor 8 New York NY 10036 © 2020, Investopedia, LLC, All Rights Reserved | Privacy Policy