Classification of Common Stock

classification of common stocks 2

Blue-chip Stocks = Blue Chip Stock’ is a stock that is issued by a large, stable, mature company.  This is not a specific list, but changes over time.

Growth Stocks = Growth Stock’ is the stock that compensates investors primarily through increase in value of the shares over time. These are issued by companies which are growing faster than average and which generally reinvest dividends.  They generally have higher PE and PB ratios than the market as a whole.

Value Stocks = Value Stocks are issued by companies which are less expensive compared to the market.  They generally have lower PE and PB ratios than the market as a whole.

Income Stocks = ‘Income Stock’ is the stock that compensates investors primarily through the regular payment of dividends. These are issued by companies which pay dividends regularly.

Cyclical Stocks = ‘Cyclical Stock’ is stock exhibiting above-average sensitivity to the business cycle. These are issue by companies whose share prices move up and down with the state of the economy.

Defensive Stocks = ‘Defensive Stock’ is a stock that is relatively insensitive to the business cycle. These are issued by companies whose share prices move opposite to the state of the economy.

CLASSIFICATION OF COMMON STOCKS

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