Learn / Glossary / Value stock
GlossaryWhat is Value stock?
A value stock looks cheap compared with how much money the company makes.
The simple explanation
Value stocks often have lower P/E ratios and may pay dividends. Investors hope the market will eventually recognize their worth, but sometimes they are cheap for a good reason.
An example
A steady company trading at a P/E of 10 while peers trade at 20 might be called a value stock.
Why it matters
Value and growth are the two classic ways of thinking about stocks.
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Educational information, not financial advice.