What is a Growth Stock? Definition, Examples, Characteristics
A growth stock is a share in a company expected to grow faster than the average market rate. These stocks usually do not pay dividends because companies prefer to reinvest profits to boost short-term growth. Investors in growth stocks aim for high profits when they sell their shares later. Growth stocks can come from any industry and often have a high price-to-earnings ratio. These companies may not be profitable now, but they are expected to make money in the future. Finding multibagger stocks is important for building wealth. Discover potential multibaggers at Sovrenn Discovery Investing in growth stocks has risks. Since they typically do not pay dividends, investors rely on selling the stock for returns. If the company performs poorly, investors may lose money when selling their shares. Growth stocks often share common traits. They usually produce unique products and may hold patents or use advanced technology to stay ahead of competitors. These companies reinvest earning...