Main Types of Stocks

Following are the different types of stocks available:

Common stock (or Ordinary shares) - It represents a form of corporate equity ownership. Common stockholders have voting rights in the meeting. However there is no fixed dividend paid out to the holders and so their returns are uncertain and determined by the directors of the company.

Concentrated stock - It is an equity making up a substantial part of an investor's portfolio. It makes a large portion of the investor's wealth dependent on the movement of one particular stock.

Golden share - This is a nominal share with special voting rights that allow the holder to outvote all other shareholders in certain specified circumstances.

Growth stock - This type of stock generates substantial positive cash flow and its revenues and earnings are expected to increase at a faster rate than the average company in its industry or the overall market.

Issued shares - This refers to the shares actually sold or awarded and are subsequently held by the shareholders.

Preferred stock (or Preference shares) - This type of stock usually provides a fixed dividend that is paid before any dividends paid to common stockholders. It usually carries no voting rights.

Restricted stock (letter stock or restricted securities) - This type of stock is not fully transferable until certain conditions have been met.

Shares authorized - This refers to the maximum number of shares that a company can issue.

Shares outstanding - These are the shares that have been authorized, issued, and bought by investors, and are available for trade.

Tracking stock (or Targeted stock) - This is issued by a parent company that is based on the operations of a wholly owned subsidiary of a diversified firm.

Treasury stock (or Reacquired stock) - This refers to the stock that is reacquired by the issuing company, and thus reducing the amount of outstanding shares in the open market.

* Featured Articles:

Types of Preference Shares

Different Types of Share Capital

Characteristics of Common Stock
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Kelvin Wong Loke Yuen is an experienced writer with a strong background in finance, specializing in the creation of informative and engaging content on topics such as investment strategies, financial ratio analysis, and more. With years of experience in both financial writing and education, Kelvin is adept at translating complex financial concepts into clear, accessible language for a wide range of audiences. Follow him on: LinkedIn.

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