Growth Stocks

Comparison Essay # 99376

Accounting > Financial
Business > Finance, Investment and Banking
Economics > Econometrics

Growth Stocks

A comparison of growth stocks and dividend stocks and their growth.

1,292 words () | 8 sources | MLA | 2007 United States

Paper Summary:

This paper discusses growth stocks verses dividend stocks and looks at why the market trend is toward investing in dividend stocks. The paper also explains why there has recently been an increase in criticism of growth stocks. Additionally, the paper describes the logic behind the investment in growth stocks and their typical expected growth, as well as provides an explanation of dividend stocks.

From the Paper:

"There is some argument made that the emphasis on growth stocks and growth investing strategies over the last 20 years has been due to the increased emphasis on speculative trading spearheaded by various hedge funds. Hedge funds and similar minded investors seek growth stocks that will increase in value rapidly over the short term with the expectation that they will dump the stock as soon as a cost justification is reached (Murphy). That said, none would argue that a renewed emphasis on dividend stocks would return some much needed stability to the stock markets and allow for wealth creation based on sound business strategies and long-term strategic decisions of the companies being invested in. There will always be companies in the markets that exhibit rapid earnings growth but the emphasis should be on stable expansion rather than on a universal drive to expand earnings across all public companies in order to please investors. This type of mindset is both self-defeating and unsustainable."

Sample of Sources Used:

"Bernstein." Yahoo! Finance (online). 8 Sept.2006<http:// finance.yahoo.com
"Dividend Stock Focus: How We Analyze Stocks." Morningstar Growth Investor, Jul/2(2006): 28. EBSCOhost online database. 8 Sept. 2006 <http://search.epnet.com>.
Johnston, Megan. "The Cheap Conglomerate." Forbes, 178/3(2006): 110. EBSCOhost online database. 8 Sept. 2006 <http://search.epnet.com>.
Murphy, A. (Ed.). Practical Financial Economics: A New Science. Westport, CT: Praeger; 2003.
"Perspectives on Growth Investing." Bernstein Disciplined-Strategies Monitor, Aug(2006): 43-53. EBSCOhost online database. 8 Sept. 2006 <http://search.epnet.com>.