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When you buy stock, you're essentially buying a tiny piece of the company it represents. Understanding how profitable the company is in relation to its stock price can be an important consideration...
The PEG ratio's validity is particularly questionable when used to compare companies expecting high growth with those expecting low-growth, or to compare companies with high P/E with those with a low P/E. It is more apt to be considered when comparing so-called growth companies (those growing earnings significantly faster than the market).
There are multiple versions of the P/E ratio, depending on whether earnings are projected or realized, and the type of earnings. "Trailing P/E" uses the weighted average share price of common shares in issue divided by the net income for the most recent 12-month period. This is the most common meaning of "P/E" if no other qualifier is specified.
A better metric to look at is the PEG ratio, for for price-to-earnings growth. Using Amazon.com as an example, Anand walks us through the PEG ratio, as well as other indicators of company growth ...
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Earnings per Share (EPS), Dividend ratio, Price/Earnings (P/E) ratio All the ratios listed above can be written as industry averages (something) such as industry averages profitability ratio, represents for the average figures of profitability ratio for a certain industry. [ 18 ]
The cyclically adjusted price-to-earnings ratio, commonly known as CAPE, [1] Shiller P/E, or P/E 10 ratio, [2] is a stock valuation measure usually applied to the US S&P 500 equity market. It is defined as price divided by the average of ten years of earnings ( moving average ), adjusted for inflation. [ 3 ]
The goal of this article is to teach you how to use price to earnings ratios (P/E ratios). We'll apply a basic P/E... Why High Fashion International Limited's (HKG:608) High P/E Ratio Isn't ...