What are preferred dividends?

Preferred dividends are the dividends that are accrued paid on a company’s preferred stock. Any time a company pays dividends, preferred shareholders have priority over common shareholders, which means dividends must always be paid to preferred shareholders before they are paid to common shareholders.

What is a preferred stock & how does it work?

It means that if you’re a preferred shareholder, you will get a fixed percentage of dividends every year. And the most valuable part of the preferred stock is that the preferred shareholders get a higher dividend rate. They are also given more preference than equity shareholders in dividend payments.

Does preferred stock pay dividends?

Luckily, most of the time, preferred stock is given out pretty regularly, at the same price, so investors can expect dividends on a regular basis. The company is not allowed to pay common shareholder any dividends until it pays preferred shareholders all outstanding and current dividends.