growth stock

Growth Stock

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

Notes:

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.

Also known as a "glamor stock".

See also: Growth Company, Growth Fund, Growth Industry, Growth Rates, P/E Ratio, Stock, Value Stock

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Growth stock

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

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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.