What financial instrument is often compared to bonds but represents ownership rather than debt?

Stocks represent ownership in a company, making them distinct from bonds, which are essentially forms of debt. When an individual purchases stocks, they acquire a share in the company, which may grant them voting rights and entitlement to a portion of the company’s profits in the form of dividends. This ownership aspect is critical as it signifies a claim on the assets and earnings of the company, distinguishing it from debt instruments like bonds, where the holder is a creditor owed money and interest. Furthermore, stocks can appreciate in value based on the company's performance and market conditions, providing investors with potential capital gains and the ability to participate in the company’s growth.

While equity is another term for ownership in a company, in this context, it can be more abstract, whereas stock is the more common and specific term used to refer to individual units of ownership. Notes and agency securities, on the other hand, are primarily forms of debt, meaning they do not fit the criteria of representing ownership.