Stocks vs. Shares Defined: What's the Difference?

Here are the differences investors need to know.

By Matthew Frankel, CFP – Updated Sep 9, 2024 at 10:04 AM EST

Key Points

Stock represents overall ownership in a company; shares indicate specific units owned.
A stake is a general term for owning part of a company, not limited to stocks.
Stockholders and shareholders refer to owners of company stock; stakeholders have broader financial interest.

In investing, the terms "stock," "share," and "stake" are often used interchangeably, but it's important for all investors to realize that each term has its own distinct meaning.

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stock quotes in newspaper — Source: Getty Images

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The words "stock" and "share" are often used interchangeably, but there are key differences between the two.

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Stocks are securities that represent ownership in a corporation. When an investor buys a company's stock, that person is not lending the company money but is buying a percentage of ownership in that company. In exchange for purchasing stocks in a given company, stockholders have a claim on part of its earnings and assets. Some stocks pay quarterly or annual dividends, which are a portion of the issuing company's earnings.

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Stock

A stock represents an ownership interest in a business. When a business wants to raise money, its board of directors determines the number of shares to issue.

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A share of stock represents ownership in a company, entitling holders to a portion of its assets, profits, and voting rights.

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Stakeholders

Stakeholders are the people and groups that affect or are affected by a company's actions.

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Related investing topics

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Treasury Bonds

Issued by the U.S. government to raise money, T-bonds should have a place in your portfolio.

What to Invest in During a Recession

When money is tight, where should your investment dollars go?

When to Sell Stocks

So when is it time to exit your position in a stock? Consider these factors.

Upcoming Stock Splits in 2026

Learn about stocks that could split in 2026 and why a company might decide to do a stock split.

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About the Author

Matt Frankel, CFP, is a contributing Motley Fool stock market analyst specializing in the real estate and financial sectors. 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, Globe St, The National Desk, and other TV networks and publications for his real estate, 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 Apple. The Motley Fool has a disclosure policy.