What is preferred stock? Definition, advantages, drawbacks - Business Insider

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Preferred stocks supply steady dividends to investors — here's how to evaluate them for your portfolio

, loans that come with contractual interest payments, and the full repayment when the bond finally matures.

Unlike common stock, preferred stock comes with limited or no voting rights — you can't use your share to vote for the board of directors, or for or against other policies. That's because preferred stocks resemble bonds in a key way: The dividend they pay every quarter is fixed — similar to a bond's interest payment — unlike a common share dividend, which often fluctuates each quarter.

 

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