Option Investor
Glossary

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Growth Stock

A company that, relative to other companies, is growing at an accelerated rate. A growth company has exhibited a higher rate of growth in earnings and is expected to continue doing so in the future. Often, a growth stock will pay little to no dividend as it continually re-invests in itself to maintain the growth. Another characteristic commonly shared by many growth stocks, is a higher P/E ratio, which can increase investment risk.