Is Preferred Stock a Good Investment?
That depends on what your investment objective is. Because preferred shares have a par value, they essentially have a maximum price that the issuing company is willing to pay for them, usually $25. So there’s a maximum upside. And unlike a common shares, there’s no chance for dividend growth.
The flip side, however, is that preferred shares pay a higher dividend than the common stock. So for income investors who want a less volatile play on an asset class, preferred shares may just be the way to go. And a few even pay monthly dividends!