What’s the Difference Between Shares vs. Stocks?

The differences between stocks and shares are subtle but important to understand when you are investing. A stock is an actual asset in which you invest, while a share is the unit of measurement for that asset. So, a stock tells you what you are investing in, and a share tells you how much of that stock you own.

Stocks

Let’s confine ourselves to equities and the equity markets. Investment professionals often use the word stocks as synonymous with companies—publicly-traded companies, of course. They might refer to energy stocks, value stocks, large- or small-cap stocks, food-sector stocks, blue-chip stocks, and so on. In each case, these categories don’t refer so much to the stocks themselves as to the corporations that issued them.

Shares

A share is the single smallest denomination of a company’s stock. So if you’re divvying up stock and referring to specific characteristics, the proper word to use is shares.

technically speaking, shares represent units of stock.

Common and preferred refer to different classes of a company’s stock. They carry different rights and privileges, and trade at different prices. Common shareholders are allowed to vote on company referenda and personnel, for example. Preferred shareholders do not possess voting rights, but on the other hand, they have priority in getting repaid if the company goes bankrupt. Both types of shares may pay dividends, but those in the preferred class are guaranteed to be paid first if a dividend is declared.

Difference between Shares and Stocks Shares Difference Between Shares and Stocks Shares are defined as the units into which the total share capital of a firm is divided or split. It is a fractional portion of an organization’s share capital, and it also comprises the ground for the ownership interest within the company.