Five Classifications Of Stocks

1. classification by shareholders' rights

1. preferred stock

Preferred stock is the symmetry of "common stock".

It is a share issued by a joint stock company that has a priority over common stock in the distribution of dividends and residual assets.

Preferred stock is also a kind of credential without time limit. Shareholders of preferred stock are generally not allowed to withdraw shares in the midway (a few redeemable preferred stock exceptions).

The main characteristics of preferred stock are three: first, preference shares usually specify dividend yield in advance.

Since the dividend rate of preferred stock is fixed in advance, the dividend of preferred stock will not be increased or reduced according to the company's operating conditions, and generally it can not participate in the dividends of the company. However, preferred stock can get dividends before the common stock. For the company, because of the fixed dividend, it does not affect the profit distribution of the company.

Two, the right scope of preferred stock is small.

Preferred shareholders generally do not have the right to vote and to be elected. They do not have the right to vote for the major operation of a joint stock company, but in some cases they can enjoy the right to vote.

If the shareholders' meeting of the company needs to discuss the claim related to the preferred stock, that is, the claim of preferred stock is prior to the common stock, while the priority of the preferred stock lies mainly in two aspects:

(1) dividends are preferred.

The order of share dividend distribution is preferred stock before the common stock.

No matter how much profit the share company may make, as long as the shareholders' meeting decides to distribute dividends, the preferred stock may receive dividends according to the predetermined dividend rate. Even if the dividend is generally reduced or no dividend is paid, the preferred stock should also be distributed on dividends.

(2) priority of residual asset allocation.

In the dissolution and bankruptcy liquidation of a joint stock company, preferred stock has the priority of assigning the remaining assets of the company, but the priority distribution right of the preferred stock is after the creditor and before the common stock.

Only after paying off creditors' debts can the preferred stock have the right to distribute the remaining assets.

Only after the preferred stock claims can the common stock participate in the distribution.

There are many kinds of preferred stock. In order to adapt to the needs of some investors who want to get some priority benefits, there are various ways of classification of priority muscles.

The main classifications are as follows:

(1) cumulative preferred stock and non cumulative preferred stock.

Cumulative preferred stock refers to a company that, within a business year, is entitled to claim the same amount of dividends if the company's earnings are not sufficient to distribute the required dividends.

For a non cumulative preferred stock, although the profits obtained by the company will have priority over ordinary shares to earn dividends, if the profits of the company are not sufficient to distribute the dividends according to the stipulated dividend, the shareholders of the non cumulative preferred stock can not ask the company to reissue the company in the following years.

Generally speaking, for investors, cumulative preferred stock is more advantageous than non cumulative preferred stock.

(2) participation in preferred stock and non participating preferred stock.

When the profits of enterprises increase, besides enjoying the interest of the established ratio, they can also participate in the preferred share of profits distribution with the common stock, which is called "participating preferred stock".

In addition to established dividends, the preferred shares no longer participate in profit distribution are called "non participating preferred shares".

Generally speaking, participation in preferred stock is more beneficial to investors than non participation in preferred stock.

(3) convertible preferred stock and non convertible preferred stock.

Convertible preferred stock refers to allowing the preferred stock holder to convert the eugenic stock into a certain amount of common stock under certain conditions.

Otherwise, it is impossible to convert preferred stock.

Convertible preferred stock is an increasingly popular stock in recent years.

(4) the preferred stock and the non retractable preferred stock can be recovered.

The recoverable preferred stock is a company that allows the issuance of such shares to recover the preferred shares at the original price plus some compensation.

When the company believes that it can replace the preferred stock with lower dividend, it often exercises this right.

On the contrary, it is the non retractable preference shares.

There are three ways to recover preferred stock:

<1> premium method.

When the company redeem preferred stock, though it is carried out according to the prescribed price, it often brings inconvenience to investors, so the company often adds a premium to the preferred stock value.

In the event of preference shares, <2> has made a portion of its funds to create a "sinking fund", which is used to redeem part of the preferred shares periodically.

<3> conversion mode.

That is, preferred stock can be converted into common stock according to regulations.

Although convertible preferred stock constitutes a category of preferred stock, it is often regarded as a practical way to recover preferred stock in foreign investment circles, but the initiative of withdrawal is not beneficial to investors but to investors.

2. ordinary shares

Common stock is the symmetry of "preferred stock". It is a kind of stock that changes with the change of corporate profits. It is the most common and basic share of the company's capital structure, and it is the basic part of the capital of the stock company.

The basic characteristic of common stock is that the base investment interests (dividends and dividends) are not agreed upon when buying, but afterwards, according to the actual operation of stock companies, the company's management is good and the returns of common shares are good.

The common stock is the most important and basic share in the capital structure of a joint stock company, and it is also the most risky stock, but it is also the most basic and common stock.

Generally speaking, the characteristics of common stock can be summarized as follows four points:

(1) shareholders holding common shares have the right to obtain dividends, but they must be paid only after they have paid dividends and preferred shares.

The dividend of common stock is not fixed, and generally depends on the net profit of the company.

When the company is running well and its profits continue to increase, the common stock can get more dividends than the preferred stock, and the stock interest rate can even exceed 50%. But in the year when the company runs poorly, it can not get even a cent, or even lose it.

(2) when a company makes liquidation due to bankruptcy or liquidation, ordinary shareholders have the right to divide the company's remaining assets, but ordinary shareholders must get the property after the company's creditors and preferred shareholders.

This shows that ordinary shareholders are more closely related to the fate of the company and share weal and woe.

When the company gains huge profits, ordinary shareholders are the main beneficiaries, and when the company loses money, they are the main losers.

(3) ordinary shareholders generally have the right to speak and vote, that is, they have the right to speak and vote on major issues of the company.

Ordinary shareholders hold one share of the voting rights, and holders of two shares have two voting rights.

Any ordinary shareholders are eligible to participate in the annual meeting of the company's highest summit, but if they do not want to participate, they may also delegate their voting rights.

(4) ordinary shareholders generally have the option of equity, that is, when the company issues new ordinary shares, the existing shareholders have the right to buy new shares at first (and possibly low price) to keep their original percentage of the ownership of the enterprise unchanged, so as to maintain their rights and interests in the company.

For example, a company's original 10 thousand shares of common stock, and you have 100 shares, accounting for 1%, now the company decided to issue 10% common shares, that is, the issuance of 1000 shares, then you have the right to buy 1% or 10 shares below the market price, so as to keep the proportion of your stock holdings unchanged.

When issuing a new stock, a shareholder with a preferred stock can exercise his preferred stock, subscribe for the newly issued stock, or sell or pfer his stock option.

Of course, when shareholders think that the purchase of new shares is unprofitable and the pfer or sale of shares is difficult or profitable, they may be allowed to expire as soon as possible.

When a company provides stock options, it usually stipulates the date of registration of shares, and only when the shareholders register and pay the shares on that date can they acquire the right of subscription and give priority to the subscription of new shares.

Usually, the stock purchased during the registration date is also known as the attached stock. Relatively, the voting after the date of the registration of the stock right is called the ex dividend stock, that is, when the stock is sold, it is no longer entitled to the stock option.

In this way, after the date of stock registration, the purchase of shares will no longer be covered by the stock option.

In this way, investors who buy stocks after the date of stock registration, including the old shareholders, have no right to buy stocks at a low price. In addition, in order to ensure the rights and interests of ordinary shares, some companies also have warrants that they can buy a certain number of common shares at a certain price in a certain period (or permanently).

The warrants of general companies are issued together with stocks and bonds, which can attract investors more.

To sum up, by the first two characteristics of common stock, it is easy to see that dividends and residual production and distribution of common stock may be ups and downs, so the risk of ordinary shareholders is the greatest.

In this case, the general shareholders are more concerned about the company's operation and development prospects, and the latter two characteristics of the common stock make the wish a reality, that is, the means to provide and guarantee the general shareholders' interest in the company's operation and development prospects.

However, it is also worth noting that when the investment shares and preferred shares are publicly issued to the general investors, the company should make investors feel that ordinary shares get higher dividend than preferred stock. Otherwise, the common stock will take risks both in investment and in dividend than preferred stock. Who else is willing to buy common stock?

Ordinary companies issue preferred shares, mainly for investors with "insurance safety", and for those who are more adventurous, ordinary stocks are more attractive.

In short, the issuance of these two different stocks is aimed at attracting more capital with different interests.

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3. post allotment

Post allotment is a stock that is inferior to common stock when interest or interest dividends and residual assets are allocated, usually redistribution of residual interest after the distribution of common shares.

If the profits of the company are huge and the number of shares issued after the issue is limited, the shareholders who buy shares after the issue can obtain very high returns.

After issuing rights issue, the funds raised generally can not generate profits immediately, and investors' scope is restricted, so the utilization rate is not high.

Post allotment is usually issued under the following circumstances:

(1) when the company issues new shares for the purpose of raising capital for expansion, in order not to reduce dividends on the old shares, the new shares will be issued after the new equipment is officially put into use.

(2) when the enterprise is annexed, it will adjust the merger ratio to the north and share the shares with the shareholders of the merged enterprise.

(3) in a company with government investment, the shares held by the government will be used as a post allotment before the interest rate of a privately held stock reaches a certain level.

2. classification according to par form

1. registered shares

When the shares are issued, they have the names of shareholders and are recorded on the company's roster of shareholders.

The characteristic of registered stock is that no one can exercise his share rights except the holder and his official agent or legal successor and donee.

In addition, the registered stock can not be pferred at any time. When pferring, the name and address of the assignee should be recorded separately on the face of the stock and the pfer procedure should be carried out on the company's roster of shareholders. Otherwise, the pfer can not take effect.

Obviously, this stock has the advantages of being safe and not afraid of losing, but the pfer procedure is cumbersome.

If such shares are to be pferred privately, such as inheritance and donation, they must be pferred immediately after the pfer occurs.

2. bearer share

When issuing shares, the names of shareholders are not recorded on the stock.

The holder can pfer shares by himself. Anyone who holds the right to shareholders will not have to prove his own shareholder qualification in any other way or way.

Such stock pfer procedures are simple, but they should also be pferred through legitimate pactions in the securities market.

3. par value shares

A stock with a par value, or short amount of stock or denomination stock, refers to a certain amount recorded on the face of the stock, such as 100 yuan, 200 yuan per share.

The amount of stock is a nominal value to the stock, so it is easy to determine the proportion of each share in the stock company.

4. no denomination shares

Also known as proportional or non denomination shares.

There is no par value in stock issuance, which only indicates the percentage of total capital per share.

Its value increases or decreases with the increase or decrease of company's property.

Therefore, the intrinsic value of this stock is always in a state of change.

The biggest advantage of this kind of stock is to avoid the divergence between the real assets of the company and the par value, because the face value of the stock is often nominal, and the concern is not the face value of the stock, but the stock price.

The issuance of such shares is extremely demanding in terms of company management, financial accounting and legal liability, so it is only popular in the United States, and many countries are not allowed to issue it at all.

3. classification of stock investment entities

The shares of Listed Companies in China can be divided into state-owned shares, legal person shares and social public shares.

The state-owned stock index has the right to represent the state investment departments or agencies to invest in state-owned assets, including shares converted into the existing state assets of the company.

Because most of the joint-stock enterprises in China are restructured from the original large and medium-sized state-owned enterprises, the state-owned shares occupy a large proportion in the company's equity.

The shares of a legal person stock index, an enterprise legal person or a public institution or a social organization with a legal person qualification may be invested partially by the assets that the company can operate in accordance with the law.

At present, in the ownership structure of Listed Companies in China, the average share of legal persons is about 20%.

According to the object of the subscription of legal person shares, the legal person shares can be further divided into three parts: the legal person share, the foreign legal person share and the legal person share.

Social public stock refers to the shares formed by individuals and institutions in China in the form of partial investment in the listed company's legitimate assets.

China's state-owned shares and corporate shares are not yet available for sale.

If a state shareholder or a legal person shareholder pfers shares, he may, within the scope of the law, sign the pfer agreement with the qualified institutional investors through the approval of the securities department, and complete the pfer of the large share rights once and for all.

As the proportion of state shares and corporate shares in the total share capital is more than 70%, in most cases, to acquire the controlling shares of a listed company, the acquirer needs to agree to grant large share interest from the original state shareholder and the legal person shareholder.

Except for a limited number of employees' shares, internal staff shares and pfer shares, the overwhelming majority of public stocks can be traded on the market.

4. classification by place of listing

The shares of Listed Companies in China are divided into A shares, B shares, H shares, N shares and shares.

This distinction is mainly determined by the place where the stock is listed and the investors it is facing.

The official name of A shares is RMB common stock.

It is a common stock issued by a company in China, which is subscribed and traded in Renminbi by domestic institutions, organizations or individuals (excluding Taiwan, Hong Kong and Macao).

The official name of B shares is RMB special stock.

It is listed on the stock exchange of the mainland (Shanghai, Shenzhen), which is denominated in Renminbi, subscribed to and traded in foreign currencies.

Its investors are limited to natural persons, legal persons and other organizations in foreign countries, natural persons, legal persons and other organizations in Hongkong, Macao and Taiwan, other Chinese citizens who settle abroad and other investors stipulated by the China Securities Regulatory Commission.

At present, investors in B-shares are mainly institutional investors in the above categories.

The registered and listed sites of B share companies are in the mainland, except for investors outside China or in Hongkong, Macao and Taiwan.

H shares, which are registered in the mainland and listed in Hongkong.

Hongkong's English is Hong Kong, taking the prefix, and Hong Kong listed foreign shares are called H-shares.

By analogy, New York's first English letter is N, and Singapore's first English alphabet is S, and New York and Singapore listed shares are called N shares and shares respectively.

5. classification by company performance

Blue chip stocks are excellent stock companies, but the definition of blue chip stocks is different at home and abroad.

In our country, investors' measurement of blue chip stocks refers to the after tax profit and net assets yield.

Generally speaking, the after tax profit of each share is in the middle position of all listed companies. After the company has been listed, the net assets earning rate, which has significantly exceeded 10% for three consecutive years, belongs to the blue chip stock.

In foreign countries, blue chip stocks mainly refer to large and stable stocks.

After a long time of efforts, these large companies have achieved a higher market share in the industry, and have formed the advantages of operating scale, with steady growth in profits and a high reputation in the market.

Blue chip stocks have higher return on investment and investment value.

Its company has the advantages of capital, market and reputation, and has a strong easy-going adaptability to various market changes. The share price of blue chip stocks is generally relatively stable and has a long-term upward trend.

Therefore, blue chip stocks are always favored by investors, especially those who are investing in long-term investments.

Corresponding to blue chip stocks, the stock index is the stock of poor performing companies.

Some of these listed companies may even enter the loss row due to their poor industry prospects or poor management.

The performance of its shares in the market is sluggish, stock prices are low, trading is not active, and year-end dividends are also bad.

When considering these stocks, investors should have a higher sense of risk and avoid blindly following the trend of speculation.