Growth Company

Growth Company

A company performing better, or expected to perform better, than its industry or the market as a whole. Companies generating a return on equity of greater than 15% are generally classified as growth companies, but not all growth companies are classified as such. These companies usually pay little to nothing in dividends as the companies reinvest most of their earnings. Some believe that many or most growth companies are overvalued, citing, for example, the large number of growth companies during the dotcom bubble. See also: Industry life cycle.
References in periodicals archive ?
For growth company management teams, a strong private equity partner can help ensure that their company not only is "IPO ready" in a much more complex environment, but also has a well-articulated growth strategy, a solid business plan, robust internal control systems, and a fully developed organization.
More than 90 percent of growth company CEOs say they used working capital for the endeavor; only 7 percent used funding from financial institutions and 2 percent from public sources.
Consider the investment characteristics of the growth company.
Looking ahead to year-end 1992, the vast majority of growth company CEOs foresee positive economic growth for the country as a whole: 86 percent, up slightly from 82 percent in March.
Nearly two in three (65 percent) growth company CEOs with fewer than 50 employees reported recession-dampened profit growth.