how do you find preferred stock

Practical, beginner-friendly guide explaining how do you find preferred stock: where to locate listings, how to screen and research issues, key metrics to check, trading tips, and Bitget-relevant o...

2025-09-20 10:27:00

By Blockchain Nomad

Article rating

4.7

113 ratings

Bitget offers a variety of ways to buy or sell popular cryptocurrencies. Buy now!

A welcome pack worth 6200 USDT for new users! Sign up now!

how do you find preferred stock — Guide

how do you find preferred stock is a common question for income-focused investors and those seeking hybrid equity exposure. This article explains, step by step, how investors locate, screen, research, and trade preferred securities in U.S. and similar public markets. You will learn where to find official listings, which filters and metrics matter, how to read offering documents, and practical trading tips — with clear, beginner-friendly guidance and pointers to Bitget tools where relevant.

截至 2025-12-31，据 S&P Global 报道，preferred securities remain an active area for issuers and investors in public markets. This guide uses established market practices and well-known reference sources to keep recommendations factual and practical.

Definition and key characteristics of preferred stock

how do you find preferred stock effectively begins with a clear definition. Preferred stock is a hybrid security that sits between common equity and debt: it typically pays a stated dividend, has priority over common stock for distributions and liquidation, but ranks below senior debt. Preferred shares often do not carry standard voting rights. Investors treat preferreds as an income instrument that may exhibit bond-like sensitivity to interest rates while retaining some equity-like features.

Key characteristics to remember:

Hybrid nature: preferred shares combine equity upside limits with fixed-income cash flow characteristics.
Dividend behavior: preferred dividends are usually fixed or formula-driven; payment can be cumulative or non‑cumulative depending on issue terms.
Priority: preferreds are senior to common stock for dividends and liquidation but subordinate to bank loans and bondholders.
Voting: most preferreds lack ordinary voting rights.
Rate structures: common types include fixed-rate, floating-rate, and fixed-to-floating coupons.

Types and variations of preferred securities

how do you find preferred stock that matches your objectives requires knowing the different subtypes. Preferred securities vary widely in structure, tax treatment, liquidity, and risk.

Common variations include:

Retail vs. institutional preferreds: retail issues typically have lower par values (often $25) and trade on public exchanges; institutional issues are often issued at $1,000 par and trade OTC.
Convertible preferreds: can convert into common shares under specified terms, providing equity upside potential.
Cumulative vs non‑cumulative: cumulative preferreds accrue unpaid dividends, while non‑cumulative do not—important for dividend risk.
Redeemable / callable: many preferreds can be called by the issuer on or after a call date at a fixed price.
Rate types: fixed-rate, floating-rate (often tied to a reference rate plus a spread), and fixed-to-floating (fixed coupon until a reset date, then floating).
Participating preferreds: may allow additional payments beyond the stated dividend under certain conditions.
Capital instruments / AT1 (for banks): additional Tier 1 or similar regulatory capital instruments have special loss-absorption features and regulatory risk.

Par value, trading venue, and tax treatment differ across these categories. Always confirm the exact structure in the prospectus.

Why investors search for preferred stock

When investors ask how do you find preferred stock, they usually have one or more objectives. Preferreds are commonly sought for:

Income generation: fixed or high-yield dividends attractive to income-focused portfolios.
Yield enhancement: preferred dividends often offer higher yields than senior corporate bonds or common dividends.
Lower volatility vs common equity: preferreds can be less volatile than the issuer's common stock, especially if price is largely driven by income yield.
Diversification: preferreds provide exposure to issuer credit and interest-rate risk different from straight bonds or equities.

Tradeoffs include credit risk, interest-rate sensitivity, call risk, and lower claim priority than bonds. Preferreds are not identical to bonds; they can skip dividends (especially non‑cumulative issues) and some bank capital instruments can be written down in stress events.

Where to find listings of preferred stocks

Answering how do you find preferred stock starts with knowing where preferred securities are listed and how to access consolidated lists. Primary sources include broker-dealer screeners, specialized aggregators, market-data platforms, and financial news pages.

Practical sources to locate listings:

Broker research portals and preferred-security screeners (use your broker’s preferred screener to access curated lists and live quotes).
Specialized websites and aggregators focused on preferred securities and hybrid instruments.
Financial news market-data pages with dedicated preferred sections.
Commercial data platforms and research services that index preferred issues and provide credit and structural data.

Exchange-listed vs OTC/institutional listings

how do you find preferred stock that is suitable for retail trading often depends on the listing venue. Retail preferreds typically trade on public exchanges at low par values (for example, $25), while many institutional issues are issued at $1,000 par and trade over-the-counter. Exchange-listed retail preferreds usually offer easier access for individual investors and clearer quoted spreads; OTC institutional issues may have deeper initial liquidity among professional desks but less transparent public quoting.

How to screen for preferred stocks — practical steps

To answer how do you find preferred stock that fits your investment criteria, use a focused screening workflow. Below is a concise, practical stepwise approach.

Choose a screener: use a broker or specialized preferred screener that includes structural fields (cumulative, convertible, call dates) and credit ratings.
Set basic issuer filters: select sectors and issuers you trust; limit exposure to highly cyclical sectors if you prefer stable dividends.
Yield filters: set a minimum current yield or yield-to-call threshold consistent with your income goal.
Price vs. liquidation preference: filter for discounts or premiums to par depending on your strategy.
Dividend frequency and cumulative status: prefer cumulative for payout protection if that is a priority.
Callability and time to next call: prioritize issues with desirable call timelines to manage reinvestment risk.
Convertible status: if you want equity upside, include convertibles; exclude them if you want pure income.
Credit rating: filter by investment-grade or a specific rating floor; check both issuer and instrument-level ratings.
Liquidity: add minimum average daily volume or maximum bid–ask spread to avoid thinly traded names.
Tax status: screen for preferreds with favorable tax treatment (qualified dividends) if relevant to your tax situation.

Each filter matters because preferred securities combine issuer credit risk, interest-rate sensitivity, and structural features (e.g., cumulative vs non‑cumulative) that determine cash-flow reliability and price behavior.

Key metrics and data fields to examine

Part of answering how do you find preferred stock is knowing which metrics to inspect for each candidate. Important fields include:

Current yield: annual dividend divided by current market price. Useful for immediate income comparison but ignores call risk and price changes.
Yield-to-call (YTC): expected yield if the issuer calls the issue at the next call date—often more relevant than yield-to-maturity for callable preferreds.
Coupon / original coupon: the stated dividend rate at issuance; matters for reinvestment and reset mechanics.
Price vs. liquidation preference: trading at discount or premium to par affects total return if held to call or liquidation.
Call date and call price: tell you when and at what price the issuer can redeem, impacting reinvestment risk.
Par / liquidation preference: the base value used in call and distribution terms.
Cumulative vs non-cumulative: determines whether missed dividends accrue.
Credit rating: issuer and issue ratings indicate default risk and relative safety.
Trading volume and bid–ask spread: liquidity measures that determine transaction cost and execution risk.
Qualified dividend status: whether dividends may receive favorable tax rates (consult your tax advisor).

Ticker conventions and identifying series

To find specific issues reliably, know how tickers are constructed. A repeated practical question is how do you find preferred stock by ticker or series. Preferred tickers often append a series identifier to the issuer's common-stock symbol: common formats include a letter suffix or punctuation followed by a letter (for example, ISSUER-A or ISSUER.A). The exact convention depends on the exchange or data provider.

Tips:

Confirm ticker format with your broker or data provider before trading; some vendors include different suffixes or duplicate symbols across venues.
Verify the par value and series number in the issuer’s prospectus to avoid trading the wrong instrument.

Evaluating issuer credit and structural terms

how do you find preferred stock that is durable for income purposes involves issuer credit assessment and careful review of structural terms. Key steps:

Check issuer financial strength: review balance sheet metrics, capital ratios (especially for banks and insurers), profitability trends, and debt maturities.
Read ratings and research: agency ratings and analyst reports highlight credit trends and potential downgrade triggers.
Examine structural provisions: payment deferral rights, cumulative status, subordination language, and any conversion or contingent write-down clauses.
For bank/insurance capital instruments: understand regulatory capital rules and loss-absorption mechanics that could affect principal or dividends in stress.

Structural differences often explain large pricing gaps between similar coupons and yields.

Liquidity, transaction costs and market microstructure

Liquidity is central when learning how do you find preferred stock you can actually trade. Preferred stocks can present thin markets and wide spreads compared with common stocks and investment-grade bonds. Practical points:

Average daily volume: smaller volume increases the chance of price impact and difficult executions.
Bid–ask spreads: wider spreads raise implicit transaction costs; factor spreads into your expected return.
Round-lot vs odd-lot: odd-lot trading can have different execution quality; confirm your broker’s handling.
Venue differences: exchange-listed retail preferreds typically have more transparent quotes; OTC trades may require dealer interaction.

Pricing behavior and sensitivity

Understanding price drivers helps answer how do you find preferred stock that suits risk tolerance. Preferred prices are influenced by:

Interest-rate sensitivity: fixed-rate preferreds move as interest rates and benchmark yields change; floating-rate issues are less rate-sensitive in many market regimes.
Spread vs Treasuries or corporates: changes in credit spreads alter preferred valuations beyond rate moves.
Call risk: when an issuer calls an issue, price typically moves toward the call price ahead of the call date, constraining upside.
Credit events and issuer actions: downgrades, regulatory changes, or bank capital actions can lead to rapid repricing.

Research sources and tools

When asking how do you find preferred stock worth owning, triangulate data across multiple trusted sources. Useful research resources include broker research pages, fixed-income manager education, independent investor-education sites, specialized aggregators, and market-data terminals. These sources provide screeners, historical pricing, structural documents, and credit analysis.

Use a systematic checklist: screener results → issuer financials → prospectus terms → ratings and commentary → liquidity checks before trading.

How to interpret offering documents and prospectuses

A direct answer to how do you find preferred stock that matches expectations is to read the offering document. The prospectus or offering memorandum contains the legal terms that determine investor rights and risks.

Key items to check in the prospectus:

Dividend payment provisions and deferral rights.
Call and redemption features and pricing.
Conversion mechanics for convertible preferreds.
Tax characterization and any special withholding rules.
Subordination and liquidation preference language.

Complex structures or unclear tax treatment warrant consultation with legal or tax advisors before purchase.

Trading and order placement considerations

Practical trading guidance answers the operational part of how do you find preferred stock. Follow these tips:

Check the quote source and venue: quotes on your screen may aggregate different venues—confirm whether a displayed quote is firm.
Use limit orders: to manage wide spreads and control execution price; market orders can fill at unfavorable levels.
Account for settlement and par values: institutional-par issues might require different minimums or settlement protocols.
Place a test order: for thin names, consider a smaller initial lot to test execution before increasing size.

Using ETFs and mutual funds as alternatives

If you ask how do you find preferred stock but prefer diversified exposure or better liquidity, consider preferred-focused ETFs or mutual funds. Benefits and tradeoffs:

Pros: instant diversification, professional management, intraday liquidity for ETFs, and reduced idiosyncratic risk.
Cons: fund fees, potential tracking differences, and exposure to interest-rate and credit risks at the fund level.

Funds are a practical route for many retail investors who want preferred exposure without researching individual issues or handling odd-lot trading.

Tax and regulatory considerations

Tax rules influence how investors answer how do you find preferred stock with the best after-tax yield. Typical considerations:

Dividend vs ordinary income: some preferred dividends may qualify for lower tax rates; others, especially from certain REITs or tax-advantaged issuers, may be ordinary income.
Issuer type nuances: preferreds from corporations, REITs, or municipal-related issuers have different tax treatments.
Regulatory capital instruments: bank AT1 and similar items may have unique tax and regulatory consequences affecting investors.

Always consult a tax advisor for specific tax treatment.

Common pitfalls and risks to watch

Common mistakes when researching how do you find preferred stock include:

Ignoring call risk: focusing only on current yield without considering yield-to-call can overstate expected return.
Underestimating liquidity costs: wide spreads can materially reduce realized returns.
Misreading cumulative vs non‑cumulative: survival of dividends may differ materially by issue.
Overemphasizing headline yield: high yield can reflect high credit or structural risk.
Treating preferreds as bonds: preferreds may lack bond protections and seniority.

Sample research workflow (step-by-step example)

Here’s a concise illustrative workflow to answer the practical question how do you find preferred stock for a conservative income allocation:

Define objective: e.g., steady income with moderate credit risk.
Run a screener: filter for cumulative, exchange-listed preferreds with minimum average daily volume and a yield-to-call range that fits your objective.
Shortlist by issuer rating and sector diversification.
Read each issue’s prospectus to confirm dividend terms, call provisions, and tax status.
Check recent trading liquidity and bid–ask spreads during different market hours.
Place a small limit order to test execution, monitor settlement, and scale up if results meet expectations.

Where to find primary market offerings and new issues

Investors who want to know how do you find preferred stock new issues can track new offerings through issuer press releases, SEC filings, broker-dealer new-issue desks, and specialized newsfeeds. Retail allocations differ from institutional allocations; new issues may have minimums and allocation rules. For practical retail access, monitor broker communications and the issuer’s investor relations announcements.

Glossary of terms

Short definitions to support your research:

Par / liquidation preference: the nominal value used for distributions and call pricing.
Current yield: annual dividend divided by current market price.
Yield-to-call: expected yield if the issue is called at the next call date.
Cumulative / non-cumulative: whether missed dividends accrue.
Callable: issuer right to redeem the security on or after a specified date.
Convertible: can convert into common equity under specified terms.
Fixed-to-floating: fixed coupon initially, switching to floating after a reset.
AT1: additional Tier 1 capital instruments in banking with loss-absorption features.
Spread: yield premium over a reference rate (e.g., Treasuries).
Qualified dividend: dividend eligible for preferential tax rates (confirm with tax advisor).

References

Primary sources and respected references used to compile this guide include: Investopedia, Fidelity (education and preferred-security screener materials), Charles Schwab (research and screener help), PIMCO educational pieces, PreferredStockChannel, AAII articles, Bankrate, NYU Libraries FAQ, and S&P Global market data and reports.

Practical next steps

To recap the practical answer to how do you find preferred stock:

Use a reputable preferred-security screener to build an initial universe.
Apply filters for yield, cumulative status, call dates, credit rating, and liquidity.
Read the prospectus for structural and tax terms.
Check issuer credit metrics and recent news or filings.
Test execution with small limit orders and consider funds or ETFs if diversification and liquidity are priorities.

Ready to explore preferred securities with practical execution tools? Discover how Bitget supports market access and use Bitget Wallet for secure custody where applicable. For more detailed screening, use your broker’s preferred-security screener or Bitget market tools to start building a watchlist today.

Note: This article is educational and informational. It does not constitute investment advice. Consult legal, tax, or financial professionals for personal guidance.

The content above has been sourced from the internet and generated using AI. For high-quality content, please visit Bitget Academy.