Growth Stock Law and Legal Definition

A growth stock is stock in a company which has earned above-average returns in the past and has a promising prospect for continuing to do so in the future. It is stock of a company which is growing earnings and/or revenue faster than its industry or the overall market. Growth stock companies usually pay little or low dividends, preferring to use the income instead to reinvest in further expansion.

Growth companies ar egenerally characterized by aboveaverage profit margins and returns on stock, above average expenditures for research and product development, and dominance in the market it serves.