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About Preferred Stocks
Best Seller!
Fundamental Analysis Handbook
Fire Your Stock Analyst
Step-by-Step Guide by Harry Domash
published by Dividend Detective • 199 Quail Run Rd. • Aptos, CA 95003 •
While your money
market fund is
paying next to
nothing, many
preferred stocks are
paying 5% to 8%.
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Why Preferred Stocks?
Corporations issue preferred stocks to raise cash. Although you buy or sell them the same way you
trade regular stocks, preferreds are more like bonds than common stocks. Investors buy them for the
steady dividends, which typically equate to 4% to 8% yields.
About Preferred Stocks
When a company issues a preferred stock, it sets the annual dividend and sells the shares at a preset
price, typically $25, but some are issued at $10, $50 or $100. In normal markets, $25 preferreds
usually trade up to $26 to $28 per share range.
The initial yield, called the “coupon rate,” is the annual dividend divided by the issue price. For
instance, the yield on shares paying $1/year on shares issued at $25 is 4%.
Most preferred stocks are “callable,” meaning that the issuer has the right to call (redeem) them at the
“call price” after a specified date (call date), typically five-years after issue. The call price is usually the
original issue price, but in some instances is slightly higher.
Companies that issue preferred stocks typically sell more than one series, for instance, Series A, Series
B, etc. Ticker symbols are not standardized and vary from site to site. However they typically start with
the issuer's common stock symbol and end with the series designator. For instance, the ticker for
Bank of America (BAC) Series N preferreds might be BAC-N, BAC-PN, BACPRN, etc.
Current Market Conditions
In normal markets, you buy preferred stocks because they offer a low-risk way to earn relatively high
dividends. But the current market is anything but normal. Consequently, picking the right preferreds
could open up the opportunity to score 10% to 20% capital gains in addition to the dividends. But,
doing that requires picking preferreds whose issuers won’t run out of the cash needed to pay the
specified dividends. Not to worry, Dividend Detective will do the analysis for you.
Dividend Detective’s Preferred Stock Portfolio
25 to 30 of our best preferred stock ideas
Included With Your Dividend Detective Premium Subscription
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About Preferred Stocks
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While your money
market fund is
paying next to
nothing, many
preferred stocks are
paying 5% to 8%.
Corporations issue preferred stocks to raise cash. Although
you buy or sell them the same way you trade regular stocks,
preferreds are more like bonds than common stocks.
Investors buy them for the steady dividends, which typically
equate to 4% to 8% yields.
When a company issues a preferred stock, it sets the annual
dividend and sells the shares at a preset price, typically $25,
but some are also issued at $10, $50 or $100.
The initial yield, called the “coupon rate,” is the annual
dividend divided by the issue price. For instance, the yield on
shares paying $1/year on shares issued at $25 is 4%.
Most preferred stocks are “callable,” meaning that the issuer
has the right to call (redeem) them at the “call price” after a
specified date (call date), typically five-years after issue. The
call price is usually the original issue price, but in some
instances is slightly higher.
Companies that issue preferred stocks typically sell more
than one series, for instance, Series A, Series B, etc. Ticker
symbols are not standardized and vary from site to site.
However they typically start with the issuer's common stock
symbol and end with the series designator. For instance, the
ticker for Bank of America (BAC) Series N preferreds might be
BAC-N, BAC-PN, BACPRN, etc.
D.D’s Premium’s Preferred Stock Portfolio
25 to 30 of our best preferred stock ideas
Subscribe • Subscription Info
$5 First Month • Then $15/mo • Cancel Anytime