Cumulative Preferred Stock

Cumulative preferred stock is preferred stock whose unpaid dividends accumulate according to its terms.

Why this matters to income investors

Missed dividends accrue under the terms, improving the claim but not guaranteeing payment.

How to use cumulative preferred stock in your research

Read the security’s payment terms, seniority, maturity or call rights, and issuer credit condition. Compare the income at your purchase price with the amount you could lose if payments stop or the security is redeemed.

This material is general education and information, not individualized investment, tax, or legal advice.