Question

look at the below discription pages for two different companies. Based on P/E and dividend yield data alone, which of the following is most likely true about the nature of these stocks?

Answer 1

Harley Davidson is a value stock compared to Zynga.

Define a value stock.

A stock that appears to trade at a lower price in comparison to its fundamentals, such as dividends, earnings, or sales, is an appealing purchase for value investors. A growth stock and a value stock can generally be compared.

Harley Davidson is a value stock as its P/E is 11 and dividend yield is 4%. Zynga on the other hand is a growth stock as its P/E is 212 and the firm doesn't pay any dividend. Hence, the last option is correct. Harley Davidson is a value stock compared to Zynga

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