What Are Common Stocks?

Most stocks you hear about are common stocks -- here's what they are.

By Matthew Frankel, CFP – Updated Aug 4, 2025 at 11:48 AM | Fact-checked by Frank Bass

Key Points

Common stock gives ownership, dividends, and voting rights, but can also fluctuate in value.
Dividend policies vary; unlike preferred stock, common stock dividends are not guaranteed.
Common stocks typically offer higher long-term gains but come with risks, especially in bankruptcy.

Common stock is a representation of partial ownership in a company and is the type of stock most people buy. Common stock comes with voting rights, as well as the possibility of dividends and capital appreciation. You can find information about a company's common stock in its balance sheet.

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A common stock certificate. — Image source: Getty Images.

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Most stocks you can buy are common stocks

When buying a stock, investors don't have to wonder exactly what type of stock it is. Common stock is the default. Preferred stock will indicate in the name that the shares are preferred. Common stock is called common for a reason.

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About the Author

Matt Frankel, CFP, is a contributing Motley Fool stock market analyst and personal finance expert covering financial stocks, REITs, SPACs, and personal finance. Prior to The Motley Fool, Matt taught high school and college mathematics. He holds a bachelor’s degree in physics from the University of South Carolina, a master’s degree in mathematics from Nova Southeastern University, and a graduate certificate in financial planning from Florida State University. He won a SABEW award for coverage of the 2017 Tax Cuts and Jobs Act. He is also regularly interviewed by Cheddar, The National Desk, and other TV networks and publications for his financial, stock market, and investing expertise.

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Matt Frankel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet. The Motley Fool has a disclosure policy.