What Is P When Used as a Fifth-Letter Identifier?

When used as the fifth letter in a ticker symbol, the letter P indicates that a security is a first-preferred issue. Referred to as a fifth-letter identifier, "P" and most other letters of the alphabet can be used to indicate that a security is not common stock, but has a special characteristic.

P as a Fifth-Letter Identifier, Explained

Fifth-letter identifiers are found on stocks listed on the Nasdaq and Over-the-Counter Bulletin Board (OTCBB). There are several different fifth-letter identifiers, ranging from A to Z, and each letter represents a different characteristic. While P indicates a first preferred stock, other examples of such characteristics and their identifiers include Class A shares ("A"), Class B shares ("B"), new issues ("D"), and foreign ("F").

The majority of the letters denote the same characteristics whether the stock is listed on the Nasdaq or OTCBB, but there are a few differences between Nasdaq fifth-letter identifiers and OTCBB fifth-letter identifiers. For instance, the OTCBB uses the letter "Q" to denote a company involved in bankruptcy proceedings, while the Nasdaq no longer does. In such a case, P refers to first-preferred stock on both exchanges.

Preferred stock ownership comes with greater rights than ownership of common stock. Preferred shareholders receive fixed dividends and are paid dividends before common shareholders. Preferred shareholders also have priority in being repaid in the event that a company liquidates. However, bondholders have priority over preferred stockholders, and preferred stock dividends can be withheld at the company's discretion. Preferred shares usually do not carry voting rights, and most are callable, which means the issuer can redeem the shares at any time.

Priority Matters

When a company has more than one simultaneous issues of preferred stock, they are ranked according to priority. Those who hold first-preferred stock have seniority, particularly with respect to dividends and assets, over other preferred stockholders, including those who own second-preferred stock (fifth-letter identifier "O"), third-preferred stock ("N"), and fourth-preferred stock ("M"). However, first-preferred shareholders are subordinate to prior-preferred stockholders and bondholders.