1 growth company | Definition of growth company
Logo
Menu
dictionary thesaurus

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

 After all, when high-growth companies flock to a specific location, jobs and higher incomes do tend to follow. — Wade Roush, Scientific American, "You Don’t Need Tech Companies to Reboot Your City’s Economy," 1 Feb. 2019 Brands has emerged as a vibrant and industry-leading growth company. — Sarah Ladd, The Courier-Journal, "Yum Brands announces new CEO taking over in 2020," 12 Aug. 2019 Saudi Arabia has also invested heavily in an investment vehicle managed by SoftBank Group ’s Masayoshi Son with stakes in Uber and other growth companies in hopes of rich payoffs. — Lauren Silva Laughlin, WSJ, "Saudi Arabia Can’t Earn Its Way Out of Trouble," 18 June 2019 High-growth companies, often in the technology space, also command high EBITDA multiples: online retail at 23.4, healthcare information and technology at 19.3 and information services at 18.8. — Glenn Peoples, Billboard, "Did Scooter Braun Overpay for Big Machine Label Group? Not at All," 29 July 2019 The diversified industrial growth company employs about 24,000 people worldwide. — Fortune, "Fortive," 1 July 2019 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

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.

See More

First Known Use of growth company

1959, in the meaning defined above

Keep scrolling for more

Keep scrolling for more

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

WORD OF THE DAY

See Definitions and Examples

Get Word of the Day daily email!