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On the surface, preferred stock shares appear to be similar to common shares. It represents the ownership one in a company. The price of the stock is also based on earnings and trading functions. Preferred stock shares might have the same value as common stock shares or are at least close to that value. Preferred shares give you dividends that are agreed upon at the time of a transaction, whereas a common shares pay out dividends that vary in value based on earnings and other factors. You will know the value of the dividend every quarter for a preferred share. In fact, that dividend might be significantly higher than the dividend of a common share. However, a preferred share does not give you voting rights in the company’s affairs like common shares offer. That is not necessarily going to be a problem when you consider the benefits associated with preferred shares.
