These stocks do not pay high dividends because the company prefers to reinvest earnings to grow faster, hence the name growth stocks. The value of the company's shares rises in tandem with its rapid growth rate, allowing investors to profit from higher returns. It is best suited for investors looking for long-term growth potential rather than an immediate second source of income. Growth stocks are riskier than their counterparts.

Growth stocks represent shares of companies with the potential for above-average revenue and earnings growth compared to other firms in the market or industry. These companies typically reinvest their profits into expanding operations, developing new products, or penetrating new markets, rather than distributing dividends to shareholders. Growth stocks often trade at higher price-to-earnings ratios (P/E ratios) due to investors' expectations of future growth. They are favored by investors seeking capital appreciation rather than immediate income. Technology, biotechnology, and other innovative sectors frequently feature growth stocks, but they can emerge in any industry. Investing in growth stocks carries higher risks due to their potential volatility, but they also offer the opportunity for substantial returns over the long term.