Value Stock


DEFINITION of 'Value Stock'

A stock that tends to trade at a lower price relative to it's fundamentals (i.e. dividends, earnings, sales, etc.) and thus considered undervalued by a value investor. Common characteristics of such stocks include a high dividend yield, low price-to-book ratio and/or low price-to-earnings ratio.


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A value investor believes that the market isn't always efficient and that it's possible to find companies trading for less than they are worth. An easy way to attempt to find value stocks is to use the "Dogs of the Dow" investing strategy - buying of the 10 highest dividend-yielding stocks on the Dow Jones at the beginning of each year and adjusting it every year thereafter.

  1. Dividend Yield

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    A stock that appears to be cheap because the stock has been trading ...
  5. Growth Stock

    Shares in a company whose earnings are expected to grow at an ...
  6. Value Investing

    The strategy of selecting stocks that trade for less than their ...
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