Types of Stocks

Types of Stocks

Common Stock: the basic definition that refers to ownership in a company.

Initial Public Offering (IPO): the first time a stock is available to be sold to the public to help generate assets to finance the company’s growth.

Growth Stock: stock of a company that focuses on growth through the reinvestment of dividends rather than paying them out to shareholders.

Preferred Stock: a special category of company stock that pays a higher dividend than common stock to its shareholders and affords them certain voting privileges.

Convertible Stock: preferred stocks that may be converted into common stocks.

Value Stock: also known as under-valued stocks that trade at a lower price than the company’s reputation, earnings outlook, or financial situation would seem to merit. Most value stocks pay out greater profits to shareholders in the form of dividends and place less emphasis on growth.