In book, while computing the dividend yield = D / P, it is mentioned in the book that “choosing high dividend yield stocks reflects a value rather than a growth investment strategy”
By this, I think it means that because D / P, ie, the dividend yield decreases as growth increases, this is now growth oriented - and when it is not growth oriented, it is value oriented by law of exception… so, high dividend yield stocks are value stocks… you will keep getting value of your money in the form of dividends,!!
Is my explanation correct?
Growth stocks tend to have high market capitalization §, hence D/P is lower.
Growth stock give low dividends. Their return will come from capital appreciation (rapid growth, early growth companies). Price-to-Book and Price-to-Earnings is the opposite. It is higher for growth stocks (price is too high compared to what company earns or has in assets).
Value stock give high dividends. They are mature stable companies that don’t have as many new investment opportunities for example. Price-to-Book and Price-to-Earnings is the opposite. It is lower for value stocks.