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Investment strategies

Growth investing

Growth investing looks for companies whose sales and earnings grow much faster than the economy, accepting a higher price for that growth.

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Growth investing looks for companies whose sales and earnings grow much faster than the economy as a whole, in the expectation that the share price will follow the business. Growth investors accept paying a higher valuation today for higher expected earnings later.

Typical signs

Revenue growth well above 10 % a year, rising earnings per share, a large market still to win, and often heavy reinvestment instead of dividends. Many growth investors also look for high returns on capital, which show that the growth is profitable.

The risk

Because the price already assumes strong growth, a slowdown can hit the share hard even if the company is still growing. Growth shares therefore tend to swing more than the market, especially when interest rates rise.

Try it

The Growth profile in the screener shows companies with revenue and earnings per share up at least 10 %, a profit over the last year and a P/E below 60. It is a starting point for research, not a list of recommendations.

Try it in the screener

The Growth profile shows companies that are growing fast. It is a learning example, not a recommendation.

Show growth stocks

This content is general information, not investment advice.