Dreyfus Research Growth Fund, Inc.

Transcription

1 Dreyfus Research Growth Fund, Inc. SEMIANNUAL REPORT August 31, 2017

2 Save time. Save paper. View your next shareholder report online as soon as it s available. Log into and sign up for Dreyfus ecommunications. It s simple and only takes a few minutes. The views expressed in this report reflect those of the portfolio manager(s) only through the end of the period covered and do not necessarily represent the views of Dreyfus or any other person in the Dreyfus organization. Any such views are subject to change at any time based upon market or other conditions and Dreyfus disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Dreyfus fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Dreyfus fund. Not FDIC-Insured Not Bank-Guaranteed May Lose Value

3 Contents T H E F U N D A Letter from the CEO of Dreyfus 2 Discussion of Fund Performance 3 Understanding Your Fund s Expenses 5 Comparing Your Fund s Expenses With Those of Other Funds 5 Statement of Investments 6 Statement of Investments in Affiliated Issuers 10 Statement of Assets and Liabilities 11 Statement of Operations 12 Statement of Changes in Net Assets 13 Financial Highlights 15 Notes to Financial Statements 20 Information About the Renewal of the Fund s Management Agreement 28 F O R M O R E I N F O R M AT I O N Back Cover

4 Dreyfus Research Growth Fund, Inc. The Fund A LETTER FROM THE CEO OF DREYFUS Dear Shareholder: We are pleased to present this semiannual report for Dreyfus Research Growth Fund, Inc., covering the six-month period from March 1, 2017 through August 31, For information about how the fund performed during the reporting period, as well as general market perspectives, we provide a Discussion of Fund Performance on the pages that follow. Financial markets generally rallied over the past six months as corporate earnings grew and global economic conditions improved. While the rally was relatively broad-based, U.S. stock market leadership shifted toward larger, growth-oriented companies and away from smaller, economically sensitive companies that had been expected to benefit from a new presidential administration s stimulative policy proposals. International stocks fared particularly well amid more positive economic data from Europe and the emerging markets. In the bond market, despite short-term interest-rate hikes from the Federal Reserve Board, yields of longer-term U.S. government securities moderated somewhat and prices rose when it became clearer that major tax and fiscal reforms would take time and political capital to enact. The markets strong performance has been supported by solid underlying fundamentals, most notably rising corporate profits, a robust labor market, and muted inflation. While we currently expect these favorable conditions to persist over the second half of the year, we remain watchful for economic and political risks that could derail the rallies. As always, we encourage you to discuss the risks and opportunities of today s investment environment with your financial advisor. Thank you for your continued confidence and support. Sincerely, Mark D. Santero Chief Executive Officer The Dreyfus Corporation September 15,

5 DISCUSSION OF FUND PERFORMANCE For the period from March 1, 2017 through August 31, 2017, as provided by Elizabeth Slover, Barry Mills, and David Sealy, Portfolio Managers Market and Fund Performance Overview For the six-month period ended August 31, 2017, Dreyfus Research Growth Fund, Inc. s Class A shares produced a total return of 6.97%, Class C shares returned 6.57%, Class I shares returned 7.13%, Class Y shares returned 7.14%, and Class Z shares returned 7.10%. 1 In comparison, the fund s benchmark, the Russell 1000 Growth Index (the Index ), produced a total return of 10.69% over the same period. 2 Equities gained ground during the reporting period in response to continued U.S. economic growth and rising corporate earnings. The fund lagged its benchmark, primarily due to disappointing returns in the health care, financials, energy, and consumer staples sectors. The Fund s Investment Approach The fund seeks long-term capital growth consistent with the preservation of capital. Current income is a secondary goal. The fund invests in stocks selected by a team of core research analysts, with each analyst responsible for fund investments in his or her area of expertise. These analysts utilize a fundamental, bottom-up research process to identify investments for the fund. The fund invests in those companies in which the analysts have the highest degree of conviction or have identified a strong near-term catalyst for earnings growth or share price appreciation. The analysts, under the direction of the head of the core research team, determine the fund s allocations among market sectors. The fund s portfolio is structured so that its sector weightings generally are similar to those of the Index. The fund typically sells a security when the research analyst responsible for the investment believes there has been a negative change in fundamental factors surrounding the company, the company has become fully valued, or a more attractive opportunity has been identified. Earnings Growth Bolstered Investor Confidence Equity markets started the reporting period on an uncertain note in response to lackluster economic data and concerns about the new U.S. presidential administration s ability to implement its business-friendly policy proposals. However, stocks began to gain ground in mid-april 2017, bolstered by rising corporate earnings, resilient consumer spending, and accelerating global economic activity. Several broad market indices hit new all-time highs in May and June as a wide range of companies posted stronger-than-expected earnings. U.S.-based multinational corporations particularly benefited from the weakening of the U.S. dollar compared to other major global currencies. In July and August, the U.S. economy showed additional signs of picking up steam, as evidenced by improved GDP growth and reports of increasing manufacturing activity. Stocks set new record highs as the reporting period ended, led by the information technology sector, while the energy and telecommunication services sectors trailed market averages. Fund Returns Constrained by a Few Disappointments The fund s performance relative to its benchmark suffered due to a few disappointing individual holdings, primarily in the health care sector. Notable underperformers included medical 3

6 DISCUSSION OF FUND PERFORMANCE (continued) equipment makers Danaher and Dentsply Sirona, and biotechnology companies TESARO and BioMarin Pharmaceutical. Several other health care holdings performed well, including plan providers UnitedHealth Group and Aetna, and equipment makers Zoetis and Boston Scientific. However, these winners failed to make up for the fund s weaker holdings in the sector. A few of the fund s holdings in other areas also fared relatively poorly, including consumer finance company Synchrony Financial and capital market firm The Goldman Sachs Group in the financials sector; drilling services provider Superior Energy Services and oil and gas exploration and production company Pioneer Natural Resources in the energy sector; and food producers Kraft Heinz and Conagra Brands, along with beverage maker Molson Coors in the consumer staples sector. On a more positive note, the fund achieved stronger relative results in the industrials sector by avoiding lagging conglomerate General Electric and focusing instead on diversified manufacturer Honeywell International, which delivered better-than-expected earnings and revenues. The fund also dodged weakness in the real estate sector, which trailed the benchmark, and added value in the telecommunication services sector by avoiding Verizon Communications in favor of T-Mobile USA, which captured additional market share. The fund participated in robust gains in the information technology sector through investments in companies such as payment processor Square, social networking leader Facebook, and online advertising giant Alphabet. Focused on Continued Growth We believe the current environment of low unemployment and stable wages is likely to remain positive for equity markets over the foreseeable future. We have positioned the fund to take advantage of a constructive market environment by emphasizing investments in areas such as the information technology sector, where growth generally is leveraged to innovation rather than government policy. At the same time, we remain watchful for challenges posed to the market by unforeseen natural disasters, the economy s persistent lack of inflation, and domestic and global political challenges. September 15, Total return includes reinvestment of dividends and any capital gains paid. It does not take into consideration the maximum initial sales charge in the case of Class A shares, or the applicable contingent deferred sales charge imposed on redemptions in the case of Class C shares. Past performance is no guarantee of future results. Share price and investment return fluctuate such that upon redemption, fund shares may be worth more or less than their original cost. The fund s returns reflect the absorption of certain fund expenses by The Dreyfus Corporation pursuant to an agreement in effect through June 30, 2018, at which time it may be extended, terminated, or modified. Had these expenses not been absorbed, the fund s returns would have been lower. 2 Source: Lipper Inc. The Russell 1000 Growth Index measures the performance of the large-cap growth segment of the U.S. equity universe. It includes those Russell 1000 companies with higher growth earning potential as defined by Russell s leading style methodology. The Russell 1000 Growth Index is constructed to provide a comprehensive and unbiased barometer for the large-cap growth segment. The index is completely reconstituted annually to ensure new and growing equities are included and that the represented companies continue to reflect growth characteristics. Investors cannot invest directly in any index. Please note: the position in any security highlighted with italicized typeface was sold during the reporting period. Equities are subject generally to market, market sector, market liquidity, issuer, and investment style risks, among other factors, to varying degrees, all of which are more fully described in the fund s prospectus. 4

7 UNDERSTANDING YOUR FUND S EXPENSES (Unaudited) As a mutual fund investor, you pay ongoing expenses, such as management fees and other expenses. Using the information below, you can estimate how these expenses affect your investment and compare them with the expenses of other funds. You also may pay one-time transaction expenses, including sales charges (loads) and redemption fees, which are not shown in this section and would have resulted in higher total expenses. For more information, see your fund s prospectus or talk to your financial adviser. Review your fund s expenses The table below shows the expenses you would have paid on a $1,000 investment in Dreyfus Research Growth Fund, Inc. from March 1, 2017 to August 31, It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses. Expenses and Value of a $1,000 Investment assuming actual returns for the six months ended August 31, 2017 Class A Class C Class I Class Y Class Z Expenses paid per $1,000 $ 5.48 $ 9.37 $ 4.18 $ 4.07 $ 4.23 Ending value (after expenses) $ 1, $ 1, $ 1, $ 1, $ 1, COMPARING YOUR FUND S EXPENSES WITH THOSE OF OTHER FUNDS (Unaudited) Using the SEC s method to compare expenses The Securities and Exchange Commission (SEC) has established guidelines to help investors assess fund expenses. Per these guidelines, the table below shows your fund s expenses based on a $1,000 investment, assuming a hypothetical 5% annualized return. You can use this information to compare the ongoing expenses (but not transaction expenses or total cost) of investing in the fund with those of other funds. All mutual fund shareholder reports will provide this information to help you make this comparison. Please note that you cannot use this information to estimate your actual ending account balance and expenses paid during the period. Expenses and Value of a $1,000 Investment assuming a hypothetical 5% annualized return for the six months ended August 31, 2017 Class A Class C Class I Class Y Class Z Expenses paid per $1,000 $ 5.35 $ 9.15 $ 4.08 $ 3.97 $ 4.13 Ending value (after expenses) $ 1, $ 1, $ 1, $ 1, $ 1, Expenses are equal to the fund s annualized expense ratio of 1.05% for Class A, 1.80% for Class C,.80% for Class I,.78% for Class Y and.81% for Class Z, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the onehalf year period). 5

8 STATEMENT OF INVESTMENTS August 31, 2017 (Unaudited) Description Shares Value ($) Common Stocks % Automobiles & Components - 2.0% Delphi Automotive 165,320 15,936,848 Tesla 53,444 a,b 19,020,720 Banks -.8% 34,957,568 JPMorgan Chase & Co. 147,886 13,441,359 Capital Goods - 8.0% Fortive 338,039 21,962,394 Honeywell International 260,051 35,957,252 PACCAR 251,500 16,681,995 Quanta Services 456,389 b 16,398,057 Raytheon 134,554 24,490,173 United Technologies 203,916 24,412,823 Consumer Durables & Apparel - 1.3% 139,902,694 Newell Brands 456,006 22,015,970 Consumer Services - 1.0% Las Vegas Sands 284,179 17,678,776 Diversified Financials - 1.2% Ameriprise Financial 147,684 20,455,711 Food & Staples Retailing - 1.5% Costco Wholesale 170,426 26,712,571 Food, Beverage & Tobacco - 3.7% Kraft Heinz 200,125 16,160,094 Monster Beverage 256,816 b 14,335,469 PepsiCo 292,808 33,886,670 Health Care Equipment & Services - 5.9% 64,382,233 Aetna 155,386 24,504,372 Boston Scientific 715,319 b 19,707,038 UnitedHealth Group 293,424 58,362,034 Insurance - 1.3% 102,573,444 Progressive 477,332 22,186,391 Materials - 3.2% Dow Chemical 378,740 25,243,021 Nucor 293,047 16,149,820 6

9 Description Shares Value ($) Common Stocks % (continued) Materials - 3.2% (continued) Vulcan Materials 125,377 15,203,215 Media - 4.1% 56,596,056 Charter Communications, Cl. A 65,265 b 26,010,713 Comcast, Cl. A 1,105,002 44,874,131 Pharmaceuticals, Biotechnology & Life Sciences - 9.5% 70,884,844 BioMarin Pharmaceutical 201,524 b 18,175,450 Celgene 271,658 b 37,741,446 Clovis Oncology 108,910 b 8,284,784 Eli Lilly & Co. 346,163 28,139,590 Merck & Co. 217,824 13,910,241 Neurocrine Biosciences 273,089 a,b 15,456,837 Regeneron Pharmaceuticals 28,305 b 14,064,754 TESARO 86,637 a,b 11,188,302 Zoetis 302,926 18,993,460 Retailing % 165,954,864 Amazon.com 84,630 b 82,988,178 Dollar Tree 205,235 b 16,344,915 Home Depot 240,453 36,036,691 Nordstrom 271,384 a 12,109,154 Priceline Group 19,925 b 36,902,694 Ulta Beauty 76,370 b 16,878,534 Semiconductors & Semiconductor Equipment - 6.3% 201,260,166 Broadcom 169,154 42,638,649 NVIDIA 217,093 36,784,238 Texas Instruments 373,799 30,958,033 Software & Services % 110,380,920 Activision Blizzard 276,476 18,125,767 Alphabet, Cl. A 19,671 b 18,790,526 Alphabet, Cl. C 68,566 b 64,406,101 Citrix Systems 240,449 b 18,805,516 Facebook, Cl. A 519,179 b 89,283,213 First Data, Cl. A 942,047 b 17,343,085 Fortinet 436,978 b 16,692,560 7

10 STATEMENT OF INVESTMENTS (Unaudited) (continued) Description Shares Value ($) Common Stocks % (continued) Software & Services % (continued) HubSpot 123,995 a,b 9,095,033 Microsoft 1,320,870 98,761,450 PayPal Holdings 478,005 b 29,483,348 salesforce.com 317,071 b 30,277,110 ServiceNow 167,123 b 19,418,021 Splunk 212,914 a,b 14,284,400 Square, Cl. A 509,406 b 13,300,591 Teradata 412,136 a,b 13,155,381 Twilio, Cl. A 339,236 a,b 9,932,830 Visa, Cl. A 333,225 34,495,452 Technology Hardware & Equipment - 4.2% 515,650,384 Apple 387,506 63,550,984 Arista Networks 52,742 b 9,290,503 Telecommunication Services - 1.0% 72,841,487 T-Mobile US 274,603 b 17,769,560 Transportation - 1.3% Union Pacific 214,732 22,611,280 Total Common Stocks (cost $1,232,117,353) 1,698,256,278 Other Investment - 2.8% Registered Investment Company; Dreyfus Institutional Preferred Government Plus Money Market Fund (cost $48,614,264) 48,614,264 c 48,614,264 8

11 Description Shares Value ($) Investment of Cash Collateral for Securities Loaned - 3.1% Registered Investment Company; Dreyfus Institutional Preferred Government Money Market Fund, Institutional Shares (cost $54,409,236) 54,409,236 c 54,409,236 Total Investments (cost $1,335,140,853) 103.3% 1,801,279,778 Liabilities, Less Cash and Receivables (3.3%) (56,748,609) Net Assets 100.0% 1,744,531,169 a Security, or portion thereof, on loan. At August 31, 2017, the value of the fund s securities on loan was $59,089,518 and the value of the collateral held by the fund was $59,575,134, consisting of cash collateral of $54,409,236 and U.S. Government & Agency securities valued at $5,165,898. b Non-income producing security. c Investment in affiliated money market mutual fund. Portfolio Summary (Unaudited) Value (%) Software & Services 29.6 Retailing 11.5 Pharmaceuticals, Biotechnology & Life Sciences 9.5 Capital Goods 8.0 Semiconductors & Semiconductor Equipment 6.3 Money Market Investments 5.9 Health Care Equipment & Services 5.9 Technology Hardware & Equipment 4.2 Media 4.1 Food, Beverage & Tobacco 3.7 Materials 3.2 Automobiles & Components 2.0 Food & Staples Retailing 1.5 Transportation 1.3 Insurance 1.3 Consumer Durables & Apparel 1.3 Diversified Financials 1.2 Telecommunication Services 1.0 Consumer Services 1.0 Banks Based on net assets. See notes to financial statements. 9

12 STATEMENT OF INVESTMENTS IN AFFILIATED ISSUERS (Unaudited) Registered Investment Companies Value 2/28/2017 ($) Purchases ($) Sales ($) Value 8/31/2017 ($) Net Assets (%) Dividends/ Distributions ($) Dreyfus Institutional Preferred Government Plus Money Market Fund 17,221, ,272, ,879,252 48,614, ,822 Dreyfus Institutional Preferred Government Money Market Fund, Institutional Shares 24,919, ,565, ,075,871 54,409, Total 42,140, ,837, ,955, ,023, ,822 See notes to financial statements. 10

13 STATEMENT OF ASSETS AND LIABILITIES August 31, 2017 (Unaudited) Cost Value Assets ($): Investments in securities See Statement of Investments (including securities on loan, valued at $59,089,518) Note 1(b): Unaffiliated issuers 1,232,117,353 1,698,256,278 Affiliated issuers 103,023, ,023,500 Cash 6,105 Dividends and securities lending income receivable 2,441,608 Receivable for shares of Common Stock subscribed 78,621 Prepaid expenses 80,554 1,803,886,666 Liabilities ($): Due to The Dreyfus Corporation and affiliates Note 3(c) 1,386,716 Liability for securities on loan Note 1(b) 54,409,236 Payable for shares of Common Stock redeemed 3,347,767 Accrued expenses 211,778 59,355,497 Net Assets ($) 1,744,531,169 Composition of Net Assets ($): Paid-in capital 1,192,888,586 Accumulated undistributed investment income net 3,620,924 Accumulated net realized gain (loss) on investments 81,882,734 Accumulated net unrealized appreciation (depreciation) on investments 466,138,925 Net Assets ($) 1,744,531,169 Net Asset Value Per Share Class A Class C Class I Class Y Class Z Net Assets ($) 474,659, ,580, ,080, ,084, ,125,636 Shares Outstanding 31,264,474 7,545,143 30,428,808 16,918,437 28,678,215 Net Asset Value Per Share ($) See notes to financial statements. 11

14 STATEMENT OF OPERATIONS Six Months Ended August 31, 2017 (Unaudited) Investment Income ($): Income: Cash dividends: Unaffiliated issuers 11,463,940 Affiliated issuers 93,822 Income from securities lending Note 1(b) 184,530 Total Income 11,742,292 Expenses: Management fee Note 3(a) 6,432,067 Shareholder servicing costs Note 3(c) 1,407,192 Distribution fees Note 3(b) 421,126 Directors fees and expenses Note 3(d) 52,527 Professional fees 52,227 Registration fees 45,620 Custodian fees Note 3(c) 41,259 Prospectus and shareholders reports 24,170 Loan commitment fees Note 2 14,277 Interest expense Note 2 1,135 Miscellaneous 11,108 Total Expenses 8,502,708 Less reduction in expenses due to undertaking Note 3(a) (377,154) Less reduction in fees due to earnings credits Note 3(c) (14,758) Net Expenses 8,110,796 Investment Income Net 3,631,496 Realized and Unrealized Gain (Loss) on Investments Note 4 ($): Net realized gain (loss) on investments 83,053,245 Net unrealized appreciation (depreciation) on investments 30,924,217 Net Realized and Unrealized Gain (Loss) on Investments 113,977,462 Net Increase in Net Assets Resulting from Operations 117,608,958 See notes to financial statements. 12

15 STATEMENT OF CHANGES IN NET ASSETS Six Months Ended August 31, 2017 (Unaudited) Year Ended February 28, 2017 Operations ($): Investment income net 3,631,496 5,950,860 Net realized gain (loss) on investments 83,053, ,808,305 Net unrealized appreciation (depreciation) on investments 30,924, ,514,448 Net Increase (Decrease) in Net Assets Resulting from Operations 117,608, ,273,613 Distributions to Shareholders from ($): Investment income net: Class A - (704,203) Class I (427,784) (2,525,061) Class Y (384,681) (1,716,931) Class Z (142,331) (2,008,079) Net realized gain on investments: Class A (11,240,207) (25,177,036) Class C (2,780,410) (6,160,717) Class I (10,858,436) (19,949,221) Class Y (5,507,097) (11,321,619) Class Z (10,188,056) (19,900,558) Total Distributions (41,529,002) (89,463,425) Capital Stock Transactions ($): Net proceeds from shares sold: Class A 14,067,731 30,743,748 Class C 1,084,128 6,342,079 Class I 47,613, ,697,648 Class Y 47,426,996 52,949,629 Class Z 895,425 2,075,626 Distributions reinvested: Class A 10,538,587 24,501,586 Class C 2,295,324 4,660,270 Class I 9,715,859 19,463,886 Class Y 2,900,753 6,057,626 Class Z 9,701,840 20,532,050 Cost of shares redeemed: Class A (57,228,312) (166,791,490) Class C (19,638,311) (24,578,584) Class I (61,579,119) (131,955,628) Class Y (34,004,629) (66,123,652) Class Z (17,361,802) (32,423,034) Increase (Decrease) in Net Assets from Capital Stock Transactions (43,571,897) (147,848,240) Total Increase (Decrease) in Net Assets 32,508,059 59,961,948 Net Assets ($): Beginning of Period 1,712,023,110 1,652,061,162 End of Period 1,744,531,169 1,712,023,110 Undistributed investment income net 3,620, ,224 13

16 STATEMENT OF CHANGES IN NET ASSETS (continued) Six Months Ended August 31, 2017 (Unaudited) Year Ended February 28, 2017 Capital Share Transactions (Shares): Class A a Shares sold 943,395 2,210,979 Shares issued for distributions reinvested 703,510 1,793,674 Shares redeemed (3,840,775) (11,838,330) Net Increase (Decrease) in Shares Outstanding (2,193,870) (7,833,677) Class C Shares sold 78, ,717 Shares issued for distributions reinvested 164, ,084 Shares redeemed (1,410,635) (1,865,676) Net Increase (Decrease) in Shares Outstanding (1,168,015) (1,015,875) Class I a Shares sold 3,191,477 7,594,287 Shares issued for distributions reinvested 647,724 1,421,822 Shares redeemed (4,138,639) (9,371,507) Net Increase (Decrease) in Shares Outstanding (299,438) (355,398) Class Y a Shares sold 3,201,070 3,760,999 Shares issued for distributions reinvested 193, ,874 Shares redeemed (2,278,518) (4,726,725) Net Increase (Decrease) in Shares Outstanding 1,116,194 (522,852) Class Z a Shares sold 59, ,949 Shares issued for distributions reinvested 636,604 1,478,574 Shares redeemed (1,145,539) (2,273,019) Net Increase (Decrease) in Shares Outstanding (449,399) (647,496) a During the period ended August 31, 2017, 128,835 Class Y shares representing $1,895,675 were exchanged for 128,674 Class I shares and 20,172 Class A shares representing $302,170 were exchanged for 20,132 Class I shares. During the period ended February 28, 2017, 182,886 Class Y shares representing $2,557,789 were exchanged for 182,822 Class I shares, 6,472 Class A shares representing $86,591 were exchanged for 6,362 Class Z shares and 21,559 Class Z shares representing $310,659 were exchanged for 21,847 Class Y shares. See notes to financial statements. 14

17 FINANCIAL HIGHLIGHTS The following tables describe the performance for each share class for the fiscal periods indicated. All information (except portfolio turnover rate) reflects financial results for a single fund share. Total return shows how much your investment in the fund would have increased (or decreased) during each period, assuming you had reinvested all dividends and distributions. These figures have been derived from the fund s financial statements. Six Months Ended August 31, 2017 Year Ended February 28/29 Class A Shares (Unaudited) Per Share Data ($): Net asset value, beginning of period Investment Operations: Investment income net a Net realized and unrealized gain (loss) on investments (.75) Total from Investment Operations (.73) Distributions: Dividends from investment income net - (.02) - - (.02) (.03) Dividends from net realized gain on investments (.36) (.71) (.90) (1.03) (.05) - Total Distributions (.36) (.73) (.90) (1.03) (.07) (.03) Net asset value, end of period Total Return (%) b 6.97 c (5.52) Ratios/Supplemental Data (%): Ratio of total expenses to average net assets 1.13 d Ratio of net expenses to average net assets 1.05 d Ratio of net investment income to average net assets.30 d Portfolio Turnover Rate c Net Assets, end of period ($ x 1,000) 474, , , , , ,404 a Based on average shares outstanding. b Exclusive of sales charge. c Not annualized. d Annualized. See notes to financial statements. 15

18 FINANCIAL HIGHLIGHTS (continued) Six Months Ended August 31, 2017 Year Ended February 28/29 Class C Shares (Unaudited) Per Share Data ($): Net asset value, beginning of period Investment Operations: Investment (loss) net a (.03) (.07) (.08) (.09) (.08) (.04) Net realized and unrealized gain (loss) on investments (.71) Total from Investment Operations (.79) Distributions: Dividends from investment income net (.01) Dividends from net realized gain on investments (.36) (.71) (.90) (1.03) (.05) - Total Distributions (.36) (.71) (.90) (1.03) (.05) (.01) Net asset value, end of period Total Return (%) b 6.57 c (6.23) Ratios/Supplemental Data (%): Ratio of total expenses to average net assets 1.87 d Ratio of net expenses to average net assets 1.80 d Ratio of net investment (loss) to average net assets (.44) d (.51) (.61) (.67) (.70) (.40) Portfolio Turnover Rate c Net Assets, end of period ($ x 1,000) 106, , , , ,347 94,187 a Based on average shares outstanding. b Exclusive of sales charge. c Not annualized. d Annualized. See notes to financial statements.. 16

19 Six Months Ended August 31, 2017 Year Ended February 28/29 Class I Shares (Unaudited) Per Share Data ($): Net asset value, beginning of period Investment Operations: Investment income net a Net realized and unrealized gain (loss) on investments (.76) Total from Investment Operations (.70) Distributions: Dividends from investment income net (.01) (.09) (.06) (.01) (.08) (.06) Dividends from net realized gain on investments (.36) (.71) (.90) (1.03) (.05) - Total Distributions (.37) (.80) (.96) (1.04) (.13) (.06) Net asset value, end of period Total Return (%) 7.13 b (5.28) Ratios/Supplemental Data (%): Ratio of total expenses to average net assets.85 c Ratio of net expenses to average net assets.80 c Ratio of net investment income to average net assets.55 c Portfolio Turnover Rate b Net Assets, end of period ($ x 1,000) 463, , , , ,794 85,640 a Based on average shares outstanding. b Not annualized. c Annualized. See notes to financial statements. 17

20 FINANCIAL HIGHLIGHTS (continued) Six Months Ended August 31, 2017 Year Ended February 28/29 Class Y Shares (Unaudited) a Per Share Data ($): Net asset value, beginning of period Investment Operations: Investment income net b Net realized and unrealized gain (loss) on investments (.75) Total from Investment Operations (.68) Distributions: Dividends from investment income net (.03) (.11) (.08) (.02) (.03) Dividends from net realized gain on investments (.36) (.71) (.90) (1.03) (.05) Total Distributions (.39) (.82) (.98) (1.05) (.08) Net asset value, end of period Total Return (%) 7.14 c (5.16) c Ratios/Supplemental Data (%): Ratio of total expenses to average net assets.78 d d Ratio of net expenses to average net assets.78 d d Ratio of net investment income to average net assets.58 d d Portfolio Turnover Rate c Net Assets, end of period ($ x 1,000) 257, , , ,554 2,721 a From July 1, 2013 (commencement of initial offering) to February 28, b Based on average shares outstanding. c Not annualized. d Annualized. See notes to financial statements. 18

21 Six Months Ended August 31, 2017 Year Ended February 28/29 Class Z Shares (Unaudited) Per Share Data ($): Net asset value, beginning of period Investment Operations: Investment income net a Net realized and unrealized gain (loss) on investments (.76) Total from Investment Operations (.71) Distributions: Dividends from investment income net (.01) (.07) (.05) (.00) b (.05) (.03) Dividends from net realized gain on investments (.36) (.71) (.90) (1.03) (.05) - Total Distributions (.37) (.78) (.95) (1.03) (.10) (.03) Net asset value, end of period Total Return (%) 7.10 c (5.31) Ratios/Supplemental Data (%): Ratio of total expenses to average net assets.83 d Ratio of net expenses to average net assets.81 d Ratio of net investment income to average net assets.55 d Portfolio Turnover Rate c Net Assets, end of period ($ x 1,000) 443, , , , , ,959 a Based on average shares outstanding. b Amount represents less than $.01 per share. c Not annualized. d Annualized. See notes to financial statements. 19

22 NOTES TO FINANCIAL STATEMENTS (Unaudited) NOTE 1 Significant Accounting Policies: Dreyfus Research Growth Fund, Inc. (the fund ) is registered under the Investment Company Act of 1940, as amended (the Act ), as a diversified open-end management investment company. The fund s investment objective is to seek long-term capital growth consistent with the preservation of capital. The Dreyfus Corporation (the Manager or Dreyfus ), a wholly-owned subsidiary of The Bank of New York Mellon Corporation ( BNY Mellon ), serves as the fund s investment adviser. Effective March 31, 2017, the fund authorized the issuance of Class T shares, but, as of the date of this report, the fund did not offer Class T shares for purchase. The fund authorized 100 million Class T shares which resulted in the fund s total authorized shares increasing from 500 million to 600 million. MBSC Securities Corporation (the Distributor ), a wholly-owned subsidiary of Dreyfus, is the distributor of the fund s shares. The fund is authorized to issue 100 million shares of $.001 par value Common Stock in each of the following classes of shares: Class A, Class C, Class I, Class T, Class Y and Class Z. Class A and Class T shares generally are subject to a sales charge imposed at the time of purchase. Class C shares are subject to a contingent deferred sales charge ( CDSC ) imposed on Class C shares redeemed within one year of purchase. Class I and Class Y shares are sold at net asset value per share generally to institutional investors. Class Z shares are sold at net asset value per share to certain shareholders of the fund. Class Z shares generally are not available for new accounts. Other differences between the classes include the services offered to and the expenses borne by each class, the allocation of certain transfer agency costs and certain voting rights. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets. The Financial Accounting Standards Board ( FASB ) Accounting Standards Codification is the exclusive reference of authoritative U.S. generally accepted accounting principles ( GAAP ) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission ( SEC ) under authority of federal laws are also sources of authoritative GAAP for SEC registrants. The fund s financial statements are prepared in accordance with GAAP, which may require the use of management estimates and assumptions. Actual results could differ from those estimates. 20

23 The fund enters into contracts that contain a variety of indemnifications. The fund s maximum exposure under these arrangements is unknown. The fund does not anticipate recognizing any loss related to these arrangements. (a) Portfolio valuation: The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e., the exit price). GAAP establishes a fair value hierarchy that prioritizes the inputs of valuation techniques used to measure fair value. This hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Additionally, GAAP provides guidance on determining whether the volume and activity in a market has decreased significantly and whether such a decrease in activity results in transactions that are not orderly. GAAP requires enhanced disclosures around valuation inputs and techniques used during annual and interim periods. Various inputs are used in determining the value of the fund s investments relating to fair value measurements. These inputs are summarized in the three broad levels listed below: Level 1 unadjusted quoted prices in active markets for identical investments. Level 2 other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.). Level 3 significant unobservable inputs (including the fund s own assumptions in determining the fair value of investments). The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. Valuation techniques used to value the fund s investments are as follows: Investments in securities are valued at the last sales price on the securities exchange or national securities market on which such securities are primarily traded. Securities listed on the National Market System for which market quotations are available are valued at the official closing price or, if there is no official closing price that day, at the last sales price. For open short positions, asked prices are used for valuation purposes. Bid price is 21

24 NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued) used when no asked price is available. Registered investment companies that are not traded on an exchange are valued at their net asset value. All of the preceding securities are generally categorized within Level 1 of the fair value hierarchy. Securities not listed on an exchange or the national securities market, or securities for which there were no transactions, are valued at the average of the most recent bid and asked prices. These securities are generally categorized within Level 2 of the fair value hierarchy. Fair valuing of securities may be determined with the assistance of a pricing service using calculations based on indices of domestic securities and other appropriate indicators, such as prices of relevant American Depository Receipts and futures. Utilizing these techniques may result in transfers between Level 1 and Level 2 of the fair value hierarchy. When market quotations or official closing prices are not readily available, or are determined not to reflect accurately fair value, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded (for example, a foreign exchange or market), but before the fund calculates its net asset value, the fund may value these investments at fair value as determined in accordance with the procedures approved by the fund s Board of Directors (the Board ). Certain factors may be considered when fair valuing investments such as: fundamental analytical data, the nature and duration of restrictions on disposition, an evaluation of the forces that influence the market in which the securities are purchased and sold, and public trading in similar securities of the issuer or comparable issuers. These securities are either categorized within Level 2 or 3 of the fair value hierarchy depending on the relevant inputs used. For restricted securities where observable inputs are limited, assumptions about market activity and risk are used and are generally categorized within Level 3 of the fair value hierarchy. The following is a summary of the inputs used as of August 31, 2017 in valuing the fund s investments: 22

25 Level 1 - Unadjusted Quoted Prices Level 2 - Other Significant Observable Inputs 23 Level 3 - Significant Unobservable Inputs Total Assets ($) Investments in Securities: Equity Securities - Domestic Common Stocks 1,655,617, ,655,617,629 Equity Securities - Foreign Common Stocks 42,638, ,638,649 Registered Investment Companies 103,023, ,023,500 See Statement of Investments for additional detailed categorizations. At August 31, 2017, there were no transfers between levels of the fair value hierarchy. (b) Securities transactions and investment income: Securities transactions are recorded on a trade date basis. Realized gains and losses from securities transactions are recorded on the identified cost basis. Dividend income is recognized on the ex-dividend date and interest income, including, where applicable, accretion of discount and amortization of premium on investments, is recognized on the accrual basis. Pursuant to a securities lending agreement with The Bank of New York Mellon, a subsidiary of BNY Mellon and an affiliate of Dreyfus, the fund may lend securities to qualified institutions. It is the fund s policy that, at origination, all loans are secured by collateral of at least 102% of the value of U.S. securities loaned and 105% of the value of foreign securities loaned. Collateral equivalent to at least 100% of the market value of securities on loan is maintained at all times. Collateral is either in the form of cash, which can be invested in certain money market mutual funds managed by Dreyfus, or U.S. Government and Agency securities. The fund is entitled to receive all dividends, interest and distributions on securities loaned, in addition to income earned as a result of the lending transaction. Should a borrower fail to return the securities in a timely manner, The Bank of New York Mellon is required to replace the securities for the benefit of the fund or credit the fund with the market value of the unreturned securities and is subrogated to the fund s rights against the borrower and the collateral. Additionally, the contractual maturity of security lending transactions are on an overnight and continuous basis. During the period ended August 31, 2017, The Bank of New York Mellon earned $34,296 from lending portfolio securities, pursuant to the securities lending agreement.

26 NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued) (c) Affiliated issuers: Investments in other investment companies advised by Dreyfus are defined as affiliated under the Act. (d) Dividends and distributions to shareholders: Dividends and distributions are recorded on the ex-dividend date. Dividends from investment income-net and dividends from net realized capital gains, if any, are normally declared and paid annually, but the fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code of 1986, as amended (the Code ). To the extent that net realized capital gains can be offset by capital loss carryovers, it is the policy of the fund not to distribute such gains. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. (e) Federal income taxes: It is the policy of the fund to continue to qualify as a regulated investment company, if such qualification is in the best interests of its shareholders, by complying with the applicable provisions of the Code, and to make distributions of taxable income sufficient to relieve it from substantially all federal income and excise taxes. As of and during the period ended August 31, 2017, the fund did not have any liabilities for any uncertain tax positions. The fund recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statement of Operations. During the period ended August 31, 2017, the fund did not incur any interest or penalties. Each tax year in the three-year period ended February 28, 2017 remains subject to examination by the Internal Revenue Service and state taxing authorities. The tax character of distributions paid to shareholders during the fiscal year ended February 28, 2017 was as follows: ordinary income $6,954,274 and long-term capital gains $82,509,151. The tax character of current year distributions will be determined at the end of the current fiscal year. NOTE 2 Bank Lines of Credit: The fund participates with other Dreyfus-managed funds in an $810 million unsecured credit facility led by Citibank, N.A. and a $300 million unsecured credit facility provided by The Bank of New York Mellon (each, a Facility ), each to be utilized primarily for temporary or emergency purposes, including the financing of redemptions. In connection therewith, the fund has agreed to pay its pro rata portion of commitment fees for each Facility. Interest is charged to the fund based on rates determined pursuant to the terms of the respective Facility at the time of borrowing. 24

27 The average amount of borrowings outstanding under the Facilities during the period ended August 31, 2017, was approximately $109,200 with a related weighted average annualized interest rate of 2.06%. NOTE 3 Management Fee and Other Transactions with Affiliates: (a) Pursuant to a management agreement (the Agreement ) with Dreyfus, the management fee is computed at the annual rate of.75% of the value of the fund s average daily net assets and is payable monthly. The Agreement provides that if in any full fiscal year the aggregate expenses of Class Z (excluding taxes, brokerage fees, interest expense, commitment fees on borrowings, and extraordinary expenses) exceed 1½% of the value of Class Z shares average daily net assets, Dreyfus will bear such excess expense. In addition, Dreyfus had contractually agreed, from March 1, 2017 through April 20, 2017, to waive receipt of its fees and/or assume the direct expenses of the fund, so that the expenses of none of the classes (excluding Rule 12b-1 Distribution Plan fees, Shareholder Services Plan fees, taxes, interest expense, brokerage commissions, commitment fees on borrowings and extraordinary expenses) exceeded.88% for Class A, C, I and Z shares and.80% for Class Y shares of the value of the respective class average daily net assets. Dreyfus has also contractually agreed, from April 21, 2017 through June 30, 2018, to waive receipt of its fees and/or assume the direct expenses of the fund, so that the expenses of none of the classes (excluding certain expenses as described above) exceed.78% of the value of the fund s average daily net assets. The reduction in expenses, pursuant to the undertaking, amounted to $377,154 during the period ended August 31, During the period ended August 31, 2017, the Distributor retained $5,403 from commissions earned on sales of the fund s Class A shares and $5,380 from CDSCs on redemptions of the fund s Class C shares. (b) Under the Distribution Plan adopted pursuant to Rule 12b-1 under the Act, Class C shares pay the Distributor for distributing its shares at an annual rate of.75% of the value of its average daily net assets. During the period ended August 31, 2017, Class C shares were charged $421,126 pursuant to the Distribution Plan. (c) Under the Shareholder Services Plan, Class A and Class C shares pay the Distributor at an annual rate of.25% of the value of their average daily net assets and Class Z shares reimburse the Distributor at an amount not to exceed an annual rate of.25% of the value of its average daily net assets for the provision of certain services. The services provided may include personal services relating to shareholder accounts, such as answering 25

28 NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued) shareholder inquiries regarding the fund and providing reports and other information, and services related to the maintenance of shareholder accounts. The Distributor may make payments to Service Agents (securities dealers, financial institutions or other industry professionals) with respect to these services. The Distributor determines the amounts to be paid to Service Agents. During the period ended August 31, 2017, Class A, Class C and Class Z shares were charged $600,197, $140,375 and $38,055, respectively, pursuant to the Shareholder Services Plan. The fund has arrangements with the transfer agent and the custodian whereby the fund may receive earnings credits when positive cash balances are maintained, which are used to offset transfer agency and custody fees. For financial reporting purposes, the fund includes net earnings credits as an expense offset in the Statement of Operations. The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of Dreyfus, under a transfer agency agreement for providing transfer agency and cash management services for the fund. The majority of transfer agency fees are comprised of amounts paid on a per account basis, while cash management fees are related to fund subscriptions and redemptions. During the period ended August 31, 2017, the fund was charged $173,413 for transfer agency services and $14,710 for cash management services. These fees are included in Shareholder servicing costs in the Statement of Operations. Cash management fees were offset by earnings credits of $14,710. The fund compensates The Bank of New York Mellon under a custody agreement for providing custodial services for the fund. These fees are determined based on net assets, geographic region and transaction activity. During the period ended August 31, 2017, the fund was charged $41,259 pursuant to the custody agreement. These fees were partially offset by earnings credits of $48. During the period ended August 31, 2017, the fund was charged $5,604 for services performed by the Chief Compliance Officer and his staff. The components of Due to The Dreyfus Corporation and affiliates in the Statement of Assets and Liabilities consist of: management fees $1,069,548, Distribution Plan fees $66,383, Shareholder Services Plan fees $144,561, custodian fees $31,805, Chief Compliance Officer fees $4,670 and transfer agency fees $76,700, which are offset against an expense reimbursement currently in effect in the amount of $6,951. (d) Each Board member also serves as a Board member of other funds within the Dreyfus complex. Annual retainer fees and attendance fees are allocated to each fund based on net assets. 26

29 NOTE 4 Securities Transactions: The aggregate amount of purchases and sales of investment securities, excluding short-term securities, during the period ended August 31, 2017, amounted to $493,293,486 and $577,102,017, respectively. At August 31, 2017, accumulated net unrealized appreciation on investments was $466,138,925, consisting of $470,047,873 gross unrealized appreciation and $3,908,948 gross unrealized depreciation. At August 31, 2017, the cost of investments for federal income tax purposes was substantially the same as the cost for financial reporting purposes (see the Statement of Investments). 27

30 INFORMATION ABOUT THE RENEWAL OF THE FUND S MANAGEMENT AGREEMENT (Unaudited) At a meeting of the fund s Board of Directors held on March 9-10, 2017, the Board considered the renewal of the fund s Management Agreement pursuant to which Dreyfus provides the fund with investment advisory and administrative services (the Agreement ). The Board members, none of whom are interested persons (as defined in the Investment Company Act of 1940, as amended) of the fund, were assisted in their review by independent legal counsel and met with counsel in executive session separate from Dreyfus representatives. In considering the renewal of the Agreement, the Board considered all factors that it believed to be relevant, including those discussed below. The Board did not identify any one factor as dispositive, and each Board member may have attributed different weights to the factors considered. Analysis of Nature, Extent, and Quality of Services Provided to the Fund. The Board considered information provided to them at the meeting and in previous presentations from Dreyfus representatives regarding the nature, extent, and quality of the services provided to funds in the Dreyfus fund complex. Dreyfus provided the number of open accounts in the fund, the fund s asset size and the allocation of fund assets among distribution channels. Dreyfus also had previously provided information regarding the diverse intermediary relationships and distribution channels of funds in the Dreyfus fund complex (such as retail direct or intermediary, in which intermediaries typically are paid by the fund and/or Dreyfus) and Dreyfus corresponding need for broad, deep, and diverse resources to be able to provide ongoing shareholder services to each intermediary or distribution channel, as applicable to the fund. The Board also considered research support available to, and portfolio management capabilities of, the fund s portfolio management personnel and that Dreyfus also provides oversight of day-to-day fund operations, including fund accounting and administration and assistance in meeting legal and regulatory requirements. The Board also considered Dreyfus extensive administrative, accounting and compliance infrastructures. The Board also considered portfolio management s brokerage policies and practices (including policies and practices regarding soft dollars) and the standards applied in seeking best execution. Comparative Analysis of the Fund s Performance and Management Fee and Expense Ratio. The Board reviewed reports prepared by Broadridge Financial Solutions, Inc. ( Broadridge ), an independent provider of investment company data, which included information comparing (1) the fund s performance with the performance of a group of comparable funds (the Performance Group ) and with a broader group of funds (the Performance Universe ), all for various periods ended January 31, 2017, and (2) the fund s actual and contractual management fees and total expenses with those of a group of comparable funds (the Expense Group ) and with a broader group of funds (the Expense Universe ), the information for which was derived in part from fund financial statements available to Broadridge as of the date of its analysis. Dreyfus previously had furnished the Board with a description of the methodology Broadridge used to select the Performance Group and Performance Universe and the Expense Group and Expense Universe. 28