| dc.description.abstract | In making investments, investors will always wish to employ strategies that will
realize superior performance. One of the most important developments in equity
management in the last several years is the creation of portfolio strategies based
on value-oriented and growth-oriented styles, where value stocks have been
defined as stocks with a higher of either earnings yield, book-to-market value,
dividend yield, or cash flow to price ratio, and growth stocks as those with a low
of these ratios. In markets around the world, value stocks have been shown to
show superior performance than growth stocks except during the later part of the
1990s. This study sought to find out whether value stocks outperform growth
stocks at the Nairobi Stock Exchange if stocks are sorted on the basis of earnings
yield, book-to-market value, and dividend yield. It is indicative from the study
that stocks at the Nairobi Stock Exchange may not be conveniently sorted into
value and growth on the basis of the dividend yield. Further, when sorted on the
basis of earnings yield and book-to-market value, there is no significant difference
between the performance of the value and growth portfolios. It therefore
appears that the value growth styles of investment may not be appropriately
applied at the Nairobi Stock Exchange. | en |
