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What is a Fifth Letter Identifier?

P (Fifth-Letter Identifier)

When used as the fifth letter in a ticker symbol, the letter P indicates it is a preferred stock. 

Preferred stock ownership has more privileges than holding a common stock. For example, preferred stockholders are paid dividends before common shareholders.

A fifth-letter identifier is a letter at the end of a stock ticker that reveals information about stocks that are subject to certain exchange requirements. The fifth letter is written following a dot after the stock’s standard company symbol.

Most stocks that are listed on the Nasdaq exchange tend to have a four-letter symbol or ticker, which represents the company’s name. For example, AMZN is the four-letter symbol for the e-commerce giant Amazon’s stock.

However, some Nasdaq-listed stocks have five-letter tickers. The fifth letter in the symbol reveals certain characteristics about the stock, with each letter of the alphabet, from A to Z, having its own meaning.

For example, if  A is used at the end of the ticker, it stands for Class A shares, while D means New Issue, which indicates the company is being reorganised.

Fifth-letter identifiers are also found on the electronic quotation service Over-the-Counter Bulletin Board (OTCBB). The Financial Industry Regulatory Authority (FINRA) provides its subscribing members with over-the-counter (OTC) trade data for US stocks.

Note that some of OTCBB’s definitions for the fifth-letter identifier differ from those of Nasdaq.

What does .P mean in stocks?

What is P as a fifth-letter identifier? Used as the fifth letter of a ticker, P indicates that the stock is preferred. Its shareholders have more advantages than common shareholders. For example, when it comes to claiming dividends and assets, this type of stock takes precedence over the common stock.

When a company liquidates, preferred shareholders have priority when it comes to being repaid. Preferred shareholders can claim more assets than common stockholders, but fewer than bondholders.

Preferred stockholders do not have voting rights and preferred stock has a callable feature, meaning the issuer can redeem the shares at a predetermined price and date, as stated in the prospectus.

Failure to pay a dividend to preferred shareholders, unlike bondholders, does not indicate that a company is in default. That’s because preferred shareholders do not have the same guarantees as creditors; preferred shares are generally rated lower than the same issuer’s bonds, with higher yields as a result.

The P (Fifth-Letter Identifier) definition on the Nasdaq and on the OTCBB are the same.

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