Preferred dividends are types of dividends that are either paid on the preferred stock or to the holders of all such stocks. Preferred shareholders who are usually paid a fixed amount, and who are at a priority from a common shareholder, are generally paid this dividend.
These dividends are paid to one particular class of stockholders by virtue of a contract. If the company by any chance fails to pay all of the dividends, claims for preferred dividends are considered before any claims for dividends on common share.