Growth Stocks

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Growth Stocks

Growth stock is stock that is expected to appreciate in price. The earnings of the issuing company may grow faster than average. Companies that have strong, steady growth and high profit margins are considered growth companies.

Things To Know

  • Growth stocks are expected to appreciate in price.

Don’t count on dividends

Growth stocks pay few, if any, dividends, because profits are put back into the company to finance its continued growth. Investors who can forgo dividends, who can tolerate greater volatility, and who can be patient may be attracted to growth stocks. This is one example of when investors may employ a buy-and-hold approach.

Some sectors of the economy that experience growth are high technology, pharmaceuticals, and telecommunications.

Learn more about the risks of growth stocks.