• Guaranteed shares are a rarely used form of preferred shares where a party other than the original company guarantees the payment of dividends.

  • Guaranteed share issues, like guaranteed bonds, are most commonly used by railroads and utilities.
  • Guaranteed stock can also refer to the physical stock that a company has on hand, especially in the retail industry.
  • In the case of guaranteed shares, the third party must essentially vouch for the party that cannot guarantee the dividend.
  • By having a guaranteed stock or a full stock of all of its stocks, a company can gain an advantage over competitors who do not have all products available.