Introduction – Growth Stocks vs Value Stocks

1
Growth Stocks vs Value Stocks Your investing
decisions make you cautious and others curious at
the same time. Why cautious because you have to
be very careful before pouring in your money and
others will go curious about how youre
achieving good returns as result. Its essential
to counter some knowledge before taking any step
ahead. Investors like you have different styles
of investing, some like to play intraday, some
are into SIPs, some are long-term investors, and
more. Your potential to invest in the stock
market requires a plan including the capacity to
take risks, the tenure of your investment and
things like this.
Various types of stocks offer returns in a
discrete way depending upon their nature, market
cap, size of the company, background of the
company, the products it deals in, etc. In this
article, well discuss the concept of growth
stocks vs value stocks, their meaning, how they
work, and investing guide about them. Lets begin
with Growth Stocks.
Growth Stocks The stocks whose profits will keep
on growing in the coming times are referred to
as the growth stocks. Growth stocks generally
have the potential to leverage their returns for
a period of time. The reason for such growth
either lies in the companys products and/or
services or the companys potential to beat its
competitors and able to deliver extraordinary
performance against its competitors business.
Investing in growth stocks is totally a choice
of the investors traders and these
2
can be any type of company say, small-cap,
mid-cap or large-cap.

• It is also said that the growth stock companies
  are generally the not-so-established ones and
  mostly look for expansion rather than
• distributing dividends to their stakeholders.
  This is because their idea is to cater for the
  maximum market and make space for themselves. The
• best 3 growth stock companies in India in 2022
  are-
• Bajaj Finance (CMP- ?7076.60, 28th July 2022)
• Britannia Industries (CMP- ?3,869.35, 28th July
  2022)
• Muthoot Finance (CMP- ?1,063.90, 28th July 2022)

Value Stocks The value stocks are those whose
market reputation is the best but are traded at
a lower value than the rest of the stocks. These
are well-established firms with already good
market cap and investing in them is most
fruitful in the long run as it is backed by
strong fundamental analysis. Value stocks can be
undervalued for many reasons like any senior
official caught in some scandal, general
violation of policies by the company or
anything. The growth of investing in value
stocks is generally mapped by the
investors/traders as these companies give steady
returns over a period
3
of time. Another point of attraction of value
stocks is they mostly give regular dividends to
the investors but are short of margin in the rise
in their stock value. The 3 Best Value Stocks
Companies in India in 2022 are-

• Sonata Software Ltd. (CMP-?697.55, 28th July
  2022)
• Avanti Feeds Ltd. (CMP- ?435.50, 28th July 2022)
• HCL Technologies Ltd. (CMP- ?943.10, 28th July
  2022)
• Growth Stocks Vs Value Stocks
• A quick view at the major point of
  differentiation in both types of stocks. Here it
  is-

Mechanism of Growth Stocks Vs Value Stocks
4
The concept behind the difference between growth
and value equities is straightforward. Value
completely outweighs development. Investors are
responsible for determining their goals for
goals-based investing and selecting growth or
value companies accordingly. Growth companies
have the potential to increase in value
significantly but are noticeably more volatile
than value stocks. Value stocks, on the other
hand, are low-risk and provide consistent
dividends, but they are unable to meet
short-term investing objectives. Investing in
growth stocks for the short-term and value stocks
for the long-term is the USP of growth and value
stocks respectively. Investors prefer to keep
value stocks for the long term since they provide
them with consistent returns and share price
growth. You can invest in growth stocks for the
short term and sell all of your holdings or book
profits to meet your expectations because growth
stocks typically dont pay dividends but
appreciate by a significant margin. Experts
agree that diversifying among growth and value
stock companies is the best strategy to play
with. You can divide your funds and designate a
portion for growth stock investments and the
remaining half for value stock investments. By
doing this, you may make sure that you can meet
both your short-term and long-term financial
objectives.
Which is Better To Invest? Growth Stocks vs
Value
5
Stocks? To make the choices between the two, here
are some points to consider regarding which way
to go.
Current Income in your Portfolio As far as the
current income is concerned, you cant expect a
growth stock to give you that as the profit of
these companies is preferred to pour in the
faster growth and expansion to garner the market
better. Vice-a-verse with the value stock, you
can expect a current income in the form of
dividends from the profit potential of the
company.
Stock Price Movement As the price of the value
stock of the company will remain stable and give
returns over a period of time but when it comes
to the growth of company stock, then the stock
price movement cannot be traced and with the
boom or boon move, the price of the stock can
fluctuate.
Investments to Payoff If you want it real quick,
then invest in those value stocks which you
think will be appreciated in the least time.
Otherwise, the growth stock investments take
time to flourish the benefits. Sometimes, you
believe in a growth company stock but it will
give returns in the longer run.
6
Tracking Indexes Trace the SP 500 Growth Index
SP 500 indexes to help you determine the next
best growth vs. value stock to put your money in.
The SP Growth index chooses the stocks with the
strongest price momentum and the best three-year
growth in profits per share and revenue among
its top 500 growth stocks whereas the SP Value
index chooses the stocks based on their
valuation metrics.
Something that you should know! The SP 500 is
not just a combination of growth value stocks
but has a level of bifurcation in both of them.
So, the growth sector has mainly two sectors
namely technology consumer discretionary which
is 40 in total of the SP 500 index. On the
other hand, the sectors like finance, energy,
consumer staples, and industry related make up
approximately 29 of such index.
Lets Wrap Investing in any of the stocks can be
the best or worst decision for the trader but
what is important is your basis for taking such
decisions. Again, your risk tolerance, your
investment amount, and your duration of
investment per se are the factors that should be
considered before making any investing plan.
7
In the pointers mentioned in the column above,
you are now well-equipped with how growth stocks
vs value stocks work and how they gain/lose
momentum in the market. None of your decision
will be wrong but what is crucial is that youll
learn all the aspects of the concerned stock and
the company whether growth or value and then you
get your money in that.
Rest, you know, Happy Investing!