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

Clean price

The quoted price of a gilt, which excludes accrued interest
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Nominal amount

The face value of a gilt. It represents the amount that will be repaid to the holder at maturity and is also used to calculate the dividend or coupon payment.
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United States Dollar (USD)

The famous greenback our friends in the US use as currency.
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Retail Prices Index (RPI)

An index published each month by the Office for National Statistics, which measures the level of retail prices in the UK. Cash flows on all index-linked gilts are linked to the RPI.
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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.
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Leverage

A method of trading using borrowed money that usually involves a very high level of risk.
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UK Treasury bill

A debt instrument issued by the UK government with a maturity of less than one year.
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Know Your Customer (KYC)

A legal requirement for financial firms to understand exactly who their customers are. Used to prevent money laundering and terrorist financing.
Read more

Earnings per share

We look at what earnings per share mean and how to calculate it
Read more
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