Preferred stocks often pay high-single-digit yields, with far less risk than their similar-yielding “common” stock cousins. While many 5% and 6% common payers are yield traps with broken business models, it is possible to find preferred payouts at these levels that are perfectly secure.
Not yet familiar with preferred stocks? With “common” shares paying so little, it’s time to get acquainted.
Most dividend darlings don’t pay much on their own common shares today. You’ll be hard-pressed to find a dividend aristocrat with a yield above 3% or a P/E ratio below 20.
On the other hand, a company will issue preferred shares to raise capital.…