Growth Stock

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".

BREAKING DOWN '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. Price-Earnings Ratio - P/E Ratio

    The Price-to-Earnings Ratio or P/E ratio is a ratio for valuing ...
  2. Growth Fund

    A diversified portfolio of stocks that has capital appreciation ...
  3. Growth Industry

    A sector of the economy experiencing a higher-than-average growth ...
  4. Growth Rates

    The amount of increase that a specific variable has gained within ...
  5. Growth At A Reasonable Price - ...

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

    A stock that tends to trade at a lower price relative to it's ...
Related Articles
  1. Mutual Funds & ETFs

    The 4 Best Vanguard Funds for Growth Investors in 2016

    Discover four mutual funds managed by the Vanguard Group that would be attractive for investors interested in investing in growth stocks in 2016.
  2. Retirement

    Is Rite Aid Stock Suitable for Your IRA or Roth IRA? (RAD)

    Find out if Rite Aid stock is suitable for an IRA investment. Learn about RAD's financial outlook and whether a traditional IRA or Roth IRA is better.
  3. Mutual Funds & ETFs

    IWD: iShares Russell 1000 Value ETF

    Learn about the iShares Russell 1000 Value exchange-traded fund (ETF), which invests in value stocks that are included in the Russell 1000 Value index.
  4. Mutual Funds & ETFs

    3 Mutual Funds That Hold Facebook Stock (FB)

    Explore detailed analysis of three mutual funds that include common stock of social media giant Facebook, Inc. in their top holdings.
  5. Stock Analysis

    Sarepta Therapeutics Made Investors Millionaires in 2 Years

    Find out how Sarepta Therapeutics made investors millionaires with its drug Eteplirsen and financially and operationally smart decisions.
  6. Stock Analysis

    Is It Too Late To Invest In Gilead Sciences? (GILD)

    Discover whether it is too late to invest in Gilead Sciences. Gilead is a leading biotechnology company with treatments for AIDS and hepatitis C.
  7. Trading Strategies

    Riding The Momentum Investing Wave

    Buy high and sell higher. Find out if you could surf these risky waters.
  8. 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.
  9. Options & Futures

    Basic Investment Objectives

    You might know about different asset types, but do you know how each type contributes to a particular goal?
  10. 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.
RELATED FAQS
  1. When does a growth stock turn into a value opportunity?

    A growth stock turns into a value opportunity when it trades at a reasonable multiple of the company's earnings per share ... Read Full Answer >>
  2. 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 >>
  3. 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 >>
  4. How attractive is the food and beverage sector for a growth investor?

    The food and beverage sector is attractive for a growth investor. The sector's high degree of volatility means it tends to ... Read Full Answer >>
  5. How attractive is the retail sector for a growth investor?

    Retail is an attractive sector for a growth investor due to its propensity for turning in bigger-than-average gains when ... Read Full Answer >>
  6. What techniques are most useful for hedging exposure to the insurance sector?

    Investing style determines the best hedging techniques for the insurance sector. This sector comprises three segments, two ... Read Full Answer >>
Hot Definitions
  1. Liquidation Margin

    Liquidation margin refers to the value of all of the equity positions in a margin account. If an investor or trader holds ...
  2. Black Swan

    An event or occurrence that deviates beyond what is normally expected of a situation and that would be extremely difficult ...
  3. Inverted Yield Curve

    An interest rate environment in which long-term debt instruments have a lower yield than short-term debt instruments of the ...
  4. Socially Responsible Investment - SRI

    An investment that is considered socially responsible because of the nature of the business the company conducts. Common ...
  5. Presidential Election Cycle (Theory)

    A theory developed by Yale Hirsch that states that U.S. stock markets are weakest in the year following the election of a ...
Trading Center