RE:As I said before, I was thinking about buying the Preferredsyou are correct that preferred will have the preference over the distribution of dividends or in general , over the claim of assets in case of bankrupcy. Bond holders have higher priority than preferred and preferred have higher priority over common share holders. So , from risk point of view , the preferred are generally considered less riskier than common shares .
as would you expect , higher the risk -> higher the return . so common shareholders participate in the growth of the company . the earnings minus preferred share dividends are distributed to common shareholders in the form of dividend or paid out later in form of share price appreciation ( future growth is funded more with retained earnings and less with debt or equity financing . preferred get the distribution and that's all .
some times company issues the preferred that are callable meaning company can call them back after certain period at a set price . othertimes, preferred are retractable meaning shareholders can sell them back to the issuer for cash or for common shares.
many are in for BPY for capital appreciation plus dividend so common would be the way to go for them as the stock is beaten down. other who need more safety and less risk, preferred would be more appropriate.
RagingBull3 wrote: but then changed my mind. What made me change was the BUY BACK of BPY, which I understand they plan to do.
In my opinion, Preferreds should have Preference over the Commons. So, Preferreds should be bought back before any Commons can be bought back. This is only my opinion.
As I understand, this is not the case here. So I'm sitting out so far.
Almost pull the trigger, but then I think they announced a Buy Back of BPY. Took the finger off the Trigger.