Physical stock certificates are becoming rare as most companies now only issue stock electronically. If you do come across one, understand that the information is based on what was true at the time the certificate was issued to the stockholder. Over time, many parts of the certificate can become obsolete including the company name, stockholder's name and the number of shares.
Step 1
Look for a box with the word "number" in it. The number uniquely identifies the certificate and is used to track ownership. Often there are two or more boxes with the number on the front of the certificate. The CUSSIP number, assigned by the Securities Exchange Commission (SEC), is also printed on the certificate. It identifies the stock as a security registered with the SEC. Confirm the type of stock the certificate represents by looking for the words "preferred" or "common." The type of stock determines shareholder privileges such as voting rights and the amount of dividends received.
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Step 2
Feel the embossed corporate seal and read the name of the company. The name and seal may change over time as companies merge or acquire one another. The state the company incorporated in is often included near the name. Since certificates represent ownership, some companies add attractive pictures, logos or designs to represent the organization. Collectors frame and gift stock certificates, not for the value of the shares, but the design on the front.
Step 3
Learn the owner of the certificate by reading the shareholder's name. The owner is as of the date printed near the name. If the shareholder were to change names (after marriage for example), either the certificate would be reprinted with the new name or a stock power identifying the old and new names would be necessary to sell the certificate.
Step 4
Determine the number of shares the certificate represents by reading the number printed next to the name or in a box marked "shares." Certificates used as gifts or purchased by collectors often represent only one share. In this case the share amount is listed multiple times one after another as a matrix. The number of shares printed may become inaccurate as the result of stock splits. To determine if this is the case, compare the date on the certificate to company the stock's split history. Certificates can be reprinted with the adjusted number of shares.
Step 5
Understand the par value of the shares by reading the "par value" amount. The issuing company assigns this amount at the time the certificate is issued. The current market value of the shares is determined by its most recent buy and sell prices on the exchange where it is traded.
Step 6
View the back of the certificate to determine if it has been endorsed, transferring ownership of the stock to either another person or to a brokerage firm to convert to electronic ownership. The form includes a space for the original owner to sign and indicate the new owner.
Tip
The paper the stock certificate is printed on verifies its authenticity. Companies use special paper and complex printing techniques to deter forgery.
Warning
Sometimes stock certificates are reported missing and reissued with a new number making the original certificate worthless.
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