Growth Stock

AAA

DEFINITION of 'Growth Stock'

Shares in a company whose earnings are expected to grow at an above-average rate relative to the market.

Also known as a "glamor stock".

INVESTOPEDIA EXPLAINS 'Growth Stock'

A growth stock usually does not pay a dividend, as the company would prefer to reinvest retained earnings in capital projects. Most technology companies are growth stocks.

Note that a growth company's stock is not always classified as growth stock. In fact, a growth company's stock is often overvalued.

RELATED TERMS
  1. Growth Fund

    A diversified portfolio of stocks that has capital appreciation ...
  2. Price-Earnings Ratio - P/E Ratio

    A valuation ratio of a company's current share price compared ...
  3. Growth At A Reasonable Price - ...

    An equity investment strategy that seeks to combine tenets of ...
  4. Value Stock

    A stock that tends to trade at a lower price relative to it's ...
  5. Growth Rates

    The amount of increase that a specific variable has gained within ...
  6. Growth Industry

    A sector of the economy experiencing a higher-than-average growth ...
RELATED FAQS
  1. How can I calculate the forward p/e of the S&P 500?

    Forward price-to-earnings, or P/E, for the S&P 500 is calculated by dividing the market share per price by the forecasted ... Read Full Answer >>
  2. What criteria classify a company as a junior gold miner?

    A junior mining company is an exploration company in search of new deposits of gold, silver, uranium or other precious metals. ... Read Full Answer >>
  3. What are some popular ETFs that track the industrial sector?

    As of April 2015, some of the most popular and best performing exchange-traded funds (ETFs) that track the industrial sector ... Read Full Answer >>
  4. How does the risk of investing in the aerospace sector compare to the broader market?

    Investing in the aerospace sector is riskier than investing in the broader market. The most accurate measure of sector volatility, ... Read Full Answer >>
  5. How does the long-term outlook of the Internet sector compare to the broader economy?

    The long-term outlook of the Internet sector is brighter than the broader economy, although winners and losers are unclear. ... Read Full Answer >>
  6. What are the differences between a bond's yield to maturity and the spot rate?

    One should expect income when buying stocks in the consumer packaged goods sector. This sector is considered a defensive ... Read Full Answer >>
Related Articles
  1. Trading Strategies

    Riding The Momentum Investing Wave

    Buy high and sell higher. Find out if you could surf these risky waters.
  2. Markets

    Is Growth Always A Good Thing?

    Getting big quickly looks good, but companies can get into trouble when they do it too fast. Find out how to spot this trouble.
  3. Options & Futures

    Basic Investment Objectives

    You might know about different asset types, but do you know how each type contributes to a particular goal?
  4. Markets

    How To Use Price-To-Sales Ratios To Value Stocks

    Take a look at how this effective ratio can be influenced by certain critical factors.
  5. Mutual Funds & ETFs

    Build A Model Portfolio With Style Investing

    This sophisticated approach will add flair to your returns.
  6. Investing

    Venturing Into Early-Stage Growth Stocks

    Picking these potential winners is all about sizing up risk. We show you how.
  7. Investing

    Steady Growth Stocks Win The Race

    Take a page from the fable of the tortoise and the hare by investing in these constant growth stocks.
  8. Active Trading

    Viewing The Market As Organized Chaos

    Find out how a cat and a ladybug prove markets are both random and efficient.
  9. Active Trading

    Peter Lynch On Playing The Market

    Everyone can appreciate great advice from a professional. Read on to benefit from the vast experience of Peter Lynch.
  10. Forex Education

    How To Use The P/E Ratio And PEG To Tell A Stock's Future

    While the price-to-earnings ratio is commonly used for assessing stock prices, the price/earnings-to-growth ratio offers forecasting advantages that investors need to know.

You May Also Like

Hot Definitions
  1. Fracking

    A slang term for hydraulic fracturing. Fracking refers to the procedure of creating fractures in rocks and rock formations ...
  2. Mixed Economic System

    An economic system that features characteristics of both capitalism and socialism.
  3. Net Worth

    The amount by which assets exceed liabilities. Net worth is a concept applicable to individuals and businesses as a key measure ...
  4. Stop-Loss Order

    An order placed with a broker to sell a security when it reaches a certain price. A stop-loss order is designed to limit ...
  5. Covered Call

    An options strategy whereby an investor holds a long position in an asset and writes (sells) call options on that same asset ...
  6. Butterfly Spread

    A neutral option strategy combining bull and bear spreads. Butterfly spreads use four option contracts with the same expiration ...
Trading Center