Price to Earnings Growth

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Benzinga  Mar 6  Comment 
Below are the top business equipment stocks on the NYSE in terms of PEG ratio. Steelcase Inc. (NYSE: SCS) has a PEG ratio of 1.45. Steelcase's trailing-twelve-month EPS is $0.69. Knoll, Inc. (NYSE: KNL) has a PEG ratio of 1.76. Knoll's...
Benzinga  Mar 5  Comment 
Below are the top mid-cap processed & packaged goods stocks on the NYSE and the NASDAQ in terms of PEG ratio. Gruma S.A.B. de CV (NYSE: GMK) has a PEG ratio of 0.78. Gruma's trailing-twelve-month EPS is $4.26. McCormick & Company,...
Benzinga  Mar 4  Comment 
Below are the top small-cap gas utilities stocks on the NYSE and the NASDAQ in terms of PEG ratio. South Jersey Industries, Inc. (NYSE: SJI) has a PEG ratio of 0.91. South Jersey Industries' trailing-twelve-month EPS is $2.85. Delta Natural...
Benzinga  Mar 3  Comment 
Below are the top general contractors stocks on the NYSE in terms of PEG ratio. Chicago Bridge & Iron Company N.V. (NYSE: CBI) has a PEG ratio of 0.91. Chicago Bridge & Iron's trailing-twelve-month revenue is $12.97 billion. EMCOR Group...
Benzinga  Mar 2  Comment 
Below are the top home furnishings & fixtures stocks on the NASDAQ in terms of PEG ratio. Hooker Furniture Corp. (NASDAQ: HOFT) has a PEG ratio of 1.14. Hooker Furniture's trailing-twelve-month revenue is $237.00 million. Select Comfort...
Mondo Visione  Feb 24  Comment 
On 1 April 2015, a common market area will be implemented in southern France under the name “Trading Region South” (TRS) replacing the existing GRTgaz PEG Sud and the TIGF market areas. PEGAS, the pan- European  gas  trading  platform...
The Economic Times  Feb 24  Comment 
According to ET Now sources the government sees growth prospects bettering in the next financial year and will target a much higher growth rate of 8%.
Benzinga  Feb 23  Comment 
Below are the top stocks in the financial sector in terms of PEG ratio. Grupo Financiero Galicia S.A. (NASDAQ: GGAL) has a PEG ratio of 0.06. Grupo Financiero Galicia's trailing-twelve-month profit margin is 48.20%. Cherry Hill Mortgage...
TheStreet.com  Feb 20  Comment 
NEW YORK (TheStreet) -- Public Service Enterprise Group stock is up 3.05% to $41.51 on heavy volume in afternoon trading Friday, after the energy holding company released its 2014 fourth quarter earnings results before the opening bell this...
Benzinga  Feb 20  Comment 
Below are the top food wholesale stocks on the NYSE and the NASDAQ in terms of PEG ratio. United Natural Foods, Inc. (NASDAQ: UNFI) has a PEG ratio of 2.00. United Natural Foods' trailing-twelve-month EPS is $2.62. The Chefs' Warehouse, Inc....




 

This article is about the financial metric Price/Earnings To Growth. For the article on the company with ticker PEG, see Public Service Enterprise Group (PEG).

The PEG ratio equals the P/E Ratio divided by projected annual earnings-per-share growth

The PEG ratio (alternately PE/G, P/E to G, Price/Earnings to Growth, or Price to Earnings to Growth) is a valuation metric comparing the Price to Earnings ratio of a company to its projected annual Earnings Per Share growth.

A PEG ratio below 1 would indicate a company is undervalued relative to its share price, while a PEG greater than 1 would indicate an overpriced stock, as a high P/E should generally correlate with a market expectation of greater forthcoming earnings.

However, as PEG relies on projected EPS growth, its usefulness is tied directly to the accuracy of such projections.

It must be noted that PEG is only a rule of thumb and has no underlying mathematical basis for gauging what a company's share price truly "should" be. The ratio has been criticized for penalizing value stocks, which have lower earnings growth.

Examples

  • Company XYZ is trading at $20/share with an EPS of $1.00 for a P/E of 20. Analysts predict a 50% annual earnings increase over the next five years. The PEG ratio of XYZ is therefore .40, indicating the stock is undervalued by the market assuming the earnings projection is accurate.
  • Company ABC is trading at $50/share with an EPS of $1.00 for a P/E of 50. Analysts predict a 50% annual earnings increase over the next five years. The PEG ratio of ABC is therefore 1.00, indicating the stock is valued properly by the market assuming the earnings projection is accurate.
  • Company LMN is trading at $10/share with an EPS of $1.00 for a P/E of 10. Analysts predict a 5% annual earnings increase over the next five years. The PEG ratio of LMN is therefore 2.00, indicating the stock is overvalued by the market assuming the earnings projection is accurate.
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