The Key Investing Styles Explained

It’s important to know the difference between value, growth and blend stocks and funds

Marco Caprotti 30 September, 2021 | 10:50AM
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Readers of the articles and analyses published by Morningstar very often find references to “value” or “growth”. It is a way that investment professionals identify the styles towards which the investment instruments are oriented. What do these terms mean, and how are the styles different from each other?

Understanding Value Vs Growth

Value stocks are those that are seen to trade at a lower stock price relative to the company fundamentals. These stocks have low market valuations in relation to some multiples, such as: price /earnings, price/book value, or price/cash flows. These companies also tend to, on average, pay higher dividends. Some examples include companies like former stock of the week Enel, oil giant Total (TTE), Spain’s Telefonica (TEF) or JPMorgan Chase () which, although belonging to different sectors, have value as a common denominator.

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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About Author

Marco Caprotti

Marco Caprotti  è Giornalista di Morningstar in Italia.