Preferred Dividend


DEFINITION of 'Preferred Dividend'

A dividend that is accrued and paid on a company's preferred shares. In the event that a company is unable to pay all dividends, claims to preferred dividends take precedence over claims to dividends that are paid on common shares.


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BREAKING DOWN 'Preferred Dividend'

Preferred stock will typically pay much higher dividend rates than common stock of the same company. This is the main benefit of owning preferred shares.

  1. Preferred Stock

    A class of ownership in a corporation that has a higher claim ...
  2. Dividend

    A distribution of a portion of a company's earnings, decided ...
  3. Preferred Debt

    Debt that is considered more important or has priority over other ...
  4. Preference Equity Redemption Cumulative ...

    A convertible preferred stock with an enhanced dividend that ...
  5. P

    A symbol that, when used as the fifth letter in a ticker symbol, ...
  6. Common Stock

    A security that represents ownership in a corporation. Holders ...
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    There are many types of companies with publicly traded shares across a range of industries. Stock market investors are hoping ... Read Full Answer >>
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    Preferred and common stocks are different in two key aspects. First, preferred stockholders have a greater claim to a company's ... Read Full Answer >>
  3. Why do some preferred stocks have a higher yield than common stocks?

    Before we answer this question, let's just take a quick review of what a stock's yield is actually measuring. The yield is ... Read Full Answer >>
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