There still is plenty of yield in the depressed preferred-stock market—even after the recent half-point yield decline in the Treasury 10-year note to 3.7%.
Many preferred issues yield 6% or more and offer investors good dividend security since they are a senior form of equity. Preferred holders also benefit since dividends, like those on common stock, usually are taxed favorably. Most preferreds with a $25 face value—the so-called retail market—trade on the New York Stock Exchange. This makes them more liquid and transparent than either corporate or municipal bonds, which change hands in the more-opaque over-the-counter market.