Ameris Bancorp Common Stock vs. Preferred Stock: Understanding the Differences

Are you considering investing in Ameris Bancorp but unsure about the difference between common stock and preferred stock? This article aims to provide a comprehensive overview of both investment options, highlighting their unique features and potential benefits.

Common Stock: The Basics

Common stock represents ownership in a company. When you purchase common stock, you become a shareholder, entitling you to a portion of the company's assets and earnings. The primary benefits of owning common stock include:

• Voting Rights: Common shareholders have the right to vote on important corporate decisions, such as electing the board of directors.
• Dividends: While not guaranteed, common shareholders may receive dividends, which are a portion of the company's earnings distributed to shareholders.
• Potential for Capital Gains: If the company's stock price increases, common shareholders can profit from the sale of their shares.

Preferred Stock: A Different Perspective

Preferred stock is a type of investment that offers certain advantages over common stock, but also comes with some limitations. Here's what you need to know:

• Fixed Dividends: Unlike common stock, preferred stock dividends are fixed and paid out before common stock dividends. This makes preferred stock a more predictable income source.
• Liquidation Preference: In the event of a company's liquidation, preferred shareholders are typically paid before common shareholders. This provides an added layer of security.
• Lack of Voting Rights: Preferred shareholders usually do not have voting rights, which means they cannot participate in corporate decision-making.

Case Study: Ameris Bancorp

Let's take a closer look at Ameris Bancorp to understand how common stock and preferred stock compare. As of the latest financial reports, Ameris Bancorp had a market capitalization of approximately $1.5 billion.

• Common Stock: Ameris Bancorp's common stock has a price of around $20 per share, with a dividend yield of 1.5%. This indicates that the company is paying out a small portion of its earnings as dividends.
• Preferred Stock: On the other hand, Ameris Bancorp's preferred stock is priced at around $25 per share, with a fixed dividend yield of 5%. This suggests that preferred shareholders receive a higher and more consistent income stream compared to common shareholders.

Conclusion

When investing in Ameris Bancorp, it's essential to understand the differences between common stock and preferred stock. While common stock offers the potential for higher returns and voting rights, preferred stock provides a more predictable income stream and added security in the event of a liquidation. Ultimately, the choice between the two depends on your investment goals and risk tolerance.