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Finance For Dummies

Finance For Dummies offers personal finance information on investing, retirement investing, finance, insurance, credit cards, loans and more. Personal finance education is our goal.

Wednesday, August 16, 2006

Growth and Value Stocks

We have discussed the ying and yang of investing many times. Another way of examing stocks is growth and value.

Here are some characteristics of both:

Growth
  • High growth rate of earnings and sales
  • High price-to-book, price-toearnings ratios
  • Reinvesting earnings in the business and paying little to no dividend
Value
  • Slower growth of earnings and sales
  • Higher dividend yields
  • Low price-to-book and P/E ratios

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