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

LSE

London Stock Exchange, which was founded in 1571 and now has a market cap of almost $5 trillion.
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Float

Listing a company on a stock exchange, or the shares that are genuinely up for grabs once it’s there.
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Running yield

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

A street in New York that became a figure of speech for the financial markets of the US.
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Annualised Rate of Return

The average annual return an investor sees over a set period of time.
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Yield to maturity (YTM)

What is yield to maturity and why is it useful?
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Accrued interest

The interest earned on a gilt since the last dividend date. When buying a gilt, the buyer pays the accrued interest at the time of a transaction to the seller in addition to the clean price of the gilt
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Xetra

A trading venue operated by the Frankfurt Stock Exchange.
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After-hours trading

Trading outside of a stock exchange's opening hours.
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