growth stock

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Related to Earnings multiples: E/P ratio

Growth stock

Common stock of a company that has an opportunity to invest money and earn more than the opportunity cost of capital.

Growth Stock

Share in a company performing better, or expected to perform better, than its industry or the market as a whole. Shares generating a return on equity of greater than 15% are generally classified as growth stocks, but not all growth stocks are classified as such. Such stocks usually pay little to nothing dividends as the companies reinvest most of their earnings. Some believe that many or most growth stocks are overvalued, citing for example the large number of growth stocks during the dotcom bubble.

growth stock

The stock of a firm that is expected to have above-average increases in revenues and earnings. These firms usually retain most earnings for reinvestment and therefore pay small dividends. The stock, often selling at relatively high price-earnings ratios, is subject to wide swings in price. Examples include Intel, General Electric, and Dell.
References in periodicals archive ?
So, although there's no set rule on when to sell, with the current surplus in demand for deals, good pricing and earnings multiples and the likelihood of adverse tax changes in the near future, 2010 is looking a good year for sellers.
a mortgage REIT, has 2005 and 2006 earnings multiples that are very similar to that of Countrywide.
Late last year, earnings multiples fell to their historical lows," noted Mutkoski.
During their earlier growth stages, Checkers and Rally's commanded earnings multiples of over 40x.