Value stock (Value-Aktie)
A stock that looks cheap relative to its earnings or book value.
In short
As of 8 October 2026A value stock is a stock that looks cheap relative to earnings, book value or dividend, for example with a low P/E or P/B ratio. Value investors hope the market underrates such companies and the price catches up later. Some stocks are cheap for a reason, though, because the business is weak. The opposite are growth stocks.
Value stocks trade at a low price relative to earnings, book value or dividend. Typical signs are a low P/E ratio, a low P/B ratio and often a higher dividend yield. The opposite are growth stocks.
The idea behind value investing: the market sometimes underrates a company, and the price later catches up with its intrinsic value. But a stock can also be cheap for good reason, for example because the business is shrinking. That is called a value trap.
Example: a bank with a P/E of 7 and a P/B of 0.8 counts as a value stock; a software company with a P/E of 40 does not. Whether the low valuation was justified only becomes clear later.
Related terms
As of 8 October 2026 · Educational content, not investment or tax advice.