However, unlike stocks but like bonds, it pays the preferred stockholder a fixed, agreed-upon dividend at regular intervals. Common stocks may pay dividends, but it varies depending on how profitable the company is. Preferred stocks are also like bonds in that if they are held until maturity (typically 30-40 years), the stockholder will get all of their principal back. However, the company reserves the right to recall preferred stocks before maturity, paying the issue price. Like bonds, and unlike stocks, preferred stock does not confer any voting rights.
It is called preferred because, in the event a company goes bankrupt, preferred stockholders will get paid back before common stockholders. However, they get paid after bondholders, and usually there is nothing left of the company's value by then.
