Understanding various stock types can help your portfolio. When most people think of sticks, they think of publicly traded stocks traded on the stock exchange. However, it is critical for investors to understand the various types of stocks available, as well as their unique characteristics, and to be able to determine when they may be a suitable investment. Below, we outline the various stock categories, with the goal of demystifying the various stock classes available to investors. Understanding various stock categories can assist investors in making more informed investment decisions and reducing portfolio risk. Preferred stockholders receive regular dividend payments before common shareholders, but they do not have voting rights. Income stocks generate consistent income by distributing a company's profits, or excess cash, in the form of higher-than-average dividends. Blue-chip stocks are shares of well-known companies with large market capitalizations. ESG stocks place a premium on environmental stewardship, social justice, and ethical business practices.