Growth Stocks in finance, are stocks that appreciate in value and yield a high return on equity (ROE). Analysts compute ROE by taking the company's net income and dividing it by the company's equity. To be classified as a growth stock, analysts expect to see at least 15 percent ROE. An investor's return typically comes from three places: * Return from appreciation of the original investment * Return from dividend payouts * Return from the retained earnings reinvested by the firm