A value stock refers to shares of a company that appears to trade at a lower price relative to its fundamentals, such as dividends, earnings, or sales, making it appealing to value investors.
A value stock can generally be contrasted with a growth stock.
- A value stock is trading at levels that are perceived to be below its fundamentals.
- Common characteristics of value stocks include high dividend yield, low P/B ratio, and a low P/E ratio.
- A value stock typically has a bargain-price as investors see the company as unfavorable in the marketplace.