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 is
the creation elf portfolio strategies based on value-oriented and growth-oriented
strategies, where value stocks have been defined as stocks with a higher of earnings
yields, book-market value, dividend yield, or cash flow to price ratio, and growth stocks
as those with a low of these ratios. This study sought to compare the performance of
value and growth stocks at the Nairobi Securities Exchange (NSE), Kenya.
This study adopted a quantitative research design. The study adopted a Quantitative
comparative design. The population comprised all the 56 listed companies at the NSE as
of 31st December, 2011. Because the study applied secondary data and some of these are already available, the study included all the 56 companies in the analysis according to the trading sector. The study used secondary data on the Price Earnings Ratio and Price to book ratios for both the growth and value stocks. The data collected from the financial
statements of the respective companies presented to the NSE. The data analysis methods involved calculating financial ratios which include the Price to earnings, price to book ratios, and dividend yield.
The study concluded that the agricultural segment was majorly comprised of growth
stocks as majority of the companies in this segment recorded a lower of all the three
ratios used. The Industrial and allied segment together with the finance and Investment
segments comprised of the value stocks because they all posted a somewhat higher of the three ratios used in the analysis. The value stocks posted low performance in terms of Price earnings, price to book ratios and dividend yield while growth stocks continuously
posted high performance. The study recommended that the companies quoted at the NSE need to make their policies clear especially as regards the kind of investors they would like to attract. The study further recommended that the Government of Kenya looks at ways of improving the performance of the agricultural segment especially for the firms
listed at the NSE. | en |