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Value stocks

Value Stocks

Stocks in companies that aren’t necessarily growing fast, but instead are dependable and stable.

These are stocks in companies that aren’t necessarily growing fast, but instead are dependable and stable. The stock price might be less than what the company is actually worth.

Investors choose value stocks because they expect the market to realise the true value of the stock over time, and the price will rise.

Value stocks tend to have a lower price-to-earnings (P/E) ratio, pay dividends, and are seen as lower risk with steadier returns. Please keep in mind that no stocks are risk free and you may lose what you put in.

Older, established companies like banks, manufacturers, or consumer goods firms are typically where you will find value stocks.

More terms

Running yield

The annual interest payment (dividend) divided by the current market price of a bond.

Synthetic ETFs

An ETF that that reproduces the return of an index through the use of swaps.

Dividends

Find out what dividends are and how they can contribute to the growth of your investment portfolio.

Coupon

Also called a dividend, this is the fixed annual interest paid to gilt holders. It’s usually paid in two equal, semi-annual instalments and expressed as a percentage of the nominal value of the gilt.

Costs and Charges

The money you pay when investing.

Alpha

The percentage by which an investor outperforms a relevant benchmark.

Unicorn

A startup valued at over £1 billion. They are rare, hence the name.

Hypothesis Testing

A mathematical test used to determine whether a claim is true or false.

Zero coupon bonds

What is a zero coupon bond?

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