Preferred and common stocks represent ownership in a company but differ in rights and benefits.
Common stockholders have voting rights in company decisions, typically one vote per share. Preferred stockholders usually do not have voting rights
Preferred stockholders receive dividends before common stockholders. This provides a more predictable income stream for preferred shareholders
In the event of liquidation, preferred stockholders are paid before common stockholders. This hierarchy affects the risk level of your investment.
Preferred stocks generally offer fixed dividends, while common stocks have variable dividends based on company performance.
Understanding the differences between preferred and common stocks is crucial. Consider your goals and risk tolerance to choose the right type for your portfolio.