Good Preferred Stocks Yielding 6% or More

Preferred stocks tend to pay more than than comparable bonds.

Preferred stocks combine elements of stocks and bonds in one investment. Typically issued at $25 a share, they pay a fixed rate of interest like bonds do. But preferreds trade like stocks and can bounce above or below the issue price. Preferreds tend to pay more than comparable bonds because they’re riskier. An issuer may be able to delay or cut payouts, and if the preferred is “non-cumulative,” the issuer isn’t on the hook to pay missed dividends. Issuers do owe all payments if a preferred is “cumulative,” but yields for these securities tend to be lower.

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Daren Fonda
Senior Associate Editor, Kiplinger's Personal Finance
Daren joined Kiplinger in July 2015 after spending more than 20 years in New York City as a business and financial writer. He spent seven years at Time magazine and joined SmartMoney in 2007, where he wrote about investing and contributed car reviews to the magazine. Daren also worked as a writer in the fund industry for Janus Capital and Fidelity Investments and has been licensed as a Series 7 securities representative.