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Why would preferred shares have less potential for capital gain compared to common stock?
True blue preferred shares are considered loose hybrids of credit and equity.  They are more senior than common equity in bankruptcy liquidation but pay out a dividend which is not mandatory. Financial institutions issue the bulk of genuine preferred shares because of their need for more flexibility than a bond but not so much that they can afford the cost to shareholders by diluting common equity. Since it is a credit-like security that receives none of the income from operations but merely pays out a potentially unpredictable yet fixed amount of income, it will perform much more like a bond, rising when interest rates fall and vice versa, and since interest rates do not move to the extent of common equity valuations, preferreds' price variances will correspond much more to bonds than common equities.  If the company stops paying the preferred dividend or looks to become in financial trouble, the price of the preferred share should be expected to fall. There are more modern preferred however.  It has now become popular to fund intermediate startups with convertible preferred shares.  Because these are derivatives based upon the common equity, they can be expected to be much more variant.