General Guide to Prefered Shares on the TSX
Are you interested in buying prefered shares on the Canadian Toronto Stock Exchange? If you are, you may not be sure as to how they work. A prefered share is the opposite of a common share in that it does not grant you any voting rights. It is more like a loan to the company than it is a share. Wheny ou purchase a Prefered share, you are buying a share that the company has a right to buy back at a set price.
Additionally, the prefered share has first grab at any available funds the company has. That is, to say, if the stock goes out of business, prefered share holders would have first access to the remaining funds.
Prefered shares generally do not accrue a great deal of capital gains or capital losses, they are generally held for income dividend purposes. I myself hold prefered shares in Loblaws, Canadian Utilities, George Weston and plan on others. The one problem with prefereds in this economic climate is that rising interest rates make P shares less attractive.
Pardon the financial ramblings in this article. I am trying to briefly and simply educate readers about the realities of the prefered share market.
Fine print down here