Preferred shares are a type of equity security that gives shareholders a higher claim on assets and earnings than common shares. They typically pay fixed dividends, which means investors receive regular income before any dividends are paid to common shareholders. This makes preferred shares an attractive option for those seeking stable returns. Unlike common shares, preferred shares usually do not come with voting rights, meaning shareholders have less influence over company decisions. However, they may have features like convertibility into common shares or callability, allowing the issuing company to repurchase them at a predetermined price. This combination of characteristics makes preferred shares a unique investment choice.