Define: Value Stock

Business, Legal & Accounting Glossary

Definition: Value Stock



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Full Definition of Value Stock


A value stock is a stock that, in the opinion of the person calling it a value stock, is undervalued and has good expectations of price appreciation. Various valuation methods are used to discover a value stock, including the dividend yield, which should be high, and the price-earnings multiple, which should be low. Theoretically, the value stock is only temporarily out of favour; when market conditions change and investor interest returns, the value stock will appreciate. A value stock is distinguished from a growth stock, which usually pays little in dividends and is likely richly valued by conventional valuation methods; nevertheless, it is believed to have good price appreciation potential because of its rapid growth. In theory, the value stock is the safer investment because of its underlying value. But in a bull market where investor optimism is heady, a value stock may well perform worse than a growth stock. Many equities cannot be neatly classified as either a value stock or a growth stock, and many if not most investors will include both types in their portfolios.


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Value Stock. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. April 06, 2020 https://payrollheaven.com/define/value-stock/.
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Value Stock. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/value-stock/ (accessed: April 06, 2020).
American Psychological Association (APA):
Value Stock. PayrollHeaven.com. Retrieved April 06, 2020, from PayrollHeaven.com website: https://payrollheaven.com/define/value-stock/

Definition Sources


Definitions for Value Stock are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 5th February, 2020