Preferred stocks are a type of equity security that gives shareholders a higher claim on assets and earnings than common stockholders. They typically pay fixed dividends, which means investors receive regular income, making them attractive for those seeking stability. However, preferred stockholders usually do not have voting rights in the company. Unlike common stocks, which can fluctuate widely in value, preferred stocks tend to be less volatile. They can be seen as a hybrid between stocks and bonds, offering features of both. In the event of liquidation, preferred shareholders are paid before common shareholders, providing an added layer of security.