growth company

noun

Definition of growth company

: a company that grows at a greater rate than the economy as a whole and that usually directs a relatively high proportion of income back into the business

Examples of growth company in a Sentence

Recent Examples on the Web

Still, unlimited vacation is a rare benefit found mainly among high-growth companies and salaried workers. Michelle Cheng, Quartz at Work, "The share of US job posts offering unlimited vacation is up sharply," 18 June 2019 The success of IPOs that are not in the highly competitive ridesharing business is a sign that investors are still hungry for new high-growth companies. Paul R. La Monica, CNN, "These companies could save the IPO market," 13 June 2019 Photo: Michael Nagle/Bloomberg News The Nasdaq Composite, however, added 0.3%, as technology and other growth companies fared better, snapping the index’s three-session losing streak. Michael Wursthorn, WSJ, "U.S. Stocks Drop Amid Geopolitical Tensions," 22 Oct. 2018 General Mills is a slow-growth company and reported nearly flat organic sales growth over the past year. The Motley Fool, The Seattle Times, "The Motley Fool: Explaining negative amortization," 18 May 2019 Stocks of small-cap growth companies, which are generally more domestic than large companies, had a rocky September but are still holding on to large gains for the year. William Power, WSJ, "U.S.-Stock Funds Rose 5.2% in the Third Quarter," 7 Oct. 2018 Netflix is due to report earnings after the market’s close on Tuesday, while other growth companies are expected to release results later this month. Michael Wursthorn, WSJ, "Growth Stocks Lead U.S. Indexes Lower," 15 Oct. 2018 Although that slide knocked Mr. Chiavarone’s fund into negative territory for the year, the fund manager remains bullish on equities and bought depressed shares of growth companies during October’s harsh selloff. Michael Wursthorn, WSJ, "October’s Market Rout Leaves Investors With No Place to Hide," 31 Oct. 2018 For those investors who want to make a blanket investment in growth companies, the technology sector may no longer be the best bet. Danielle Chemtob, WSJ, "Facebook, Google Aren’t Tech Stocks? What That Means for Investors," 1 July 2018

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'growth company.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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First Known Use of growth company

1959, in the meaning defined above

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Last Updated

30 Jun 2019

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The first known use of growth company was in 1959

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More Definitions for growth company

growth company

noun

Financial Definition of growth company

What It Is

Growth companies are fast-growing, higher-risk companies. They tend to be young. Their stocks offer a higher chance of higher returns and a higher chance of losses.

How It Works

The nature of a company's business determines many of the characteristics of its stock, especially for growth companies. For example, blue-chip stocks are stocks issued by high-quality, large companies and generally have steady dividend payments. Their values don't "jump around" as much as shares of smaller, riskier companies like growth companies, generally speaking, and so conservative investors who like dividend payments and not much risk tend to avoid growth companies.

Growth companies are generally riskier than other types of companies, but their stocks also offer a chance at very high returns. These returns are often in the form of capital gains rather than dividends. Tech companies are generally good examples of growth companies -- they tend to reinvest all excess cash into their businesses and rely heavily on research and development of products that can be very lucrative but easily outdated.

Why It Matters

Deciding whether to buy stocks of growth companies, or which growth stocks to buy requires you to consider your goals in life, your age, your cash needs, future cash needs you might have (retirement, college, etc.), your tax situation, the nature of your other investments, and how much risk you're willing to take. For those willing to tolerate the risk, the rewards can be quite large (and the losses can be quite large).

Source: Investing Answers

growth company

Legal Definition of growth company

see company

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