Price to Earnings Growth

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Benzinga  May 15  Comment 
Below are the top independent oil & gas stocks on the NYSE in terms of PEG ratio. Midstates Petroleum Company Inc (NYSE: MPO) has a PEG ratio of 0.07. Midstates Petroleum's trailing-twelve-month ROI is 11.60 percent. Bellatrix Exploration...
Benzinga  May 14  Comment 
Below are the top asset management stocks on the NYSE in terms of PEG ratio. Fortress Investment Group LLC (NYSE: FIG) has a PEG ratio of 0.33. Fortress Investment's trailing-twelve-month profit margin is 5.60 percent. Voya Financial Inc ...
Benzinga  May 13  Comment 
Below are the top information technology services stocks on the NASDAQ in terms of PEG ratio. Computer Task Group, Inc. (NASDAQ: CTG) has a PEG ratio of 0.84. Computer Task Group's trailing-twelve-month profit margin is 2.10 percent. Syntel,...
Benzinga  May 12  Comment 
Below are the top drug stores stocks on the NYSE and the NASDAQ in terms of PEG ratio. Rite Aid Corporation (NYSE: RAD) has a PEG ratio of 0.10. Rite Aid's trailing-twelve-month profit margin is 8.00 percent. GNC Holdings Inc (NYSE: GNC)...
Benzinga  May 11  Comment 
Below are the top discount, variety stores stocks on the NASDAQ in terms of PEG ratio. PriceSmart, Inc. (NASDAQ: PSMT) has a PEG ratio of 0.92. PriceSmart's trailing-twelve-month profit margin is 3.30 percent. Dollar Tree, Inc. (NASDAQ:...
Benzinga  May 8  Comment 
Below are the top food wholesale stocks on the NYSE and the NASDAQ in terms of PEG ratio. The Chefs Warehouse, Inc (NASDAQ: CHEF) has a PEG ratio of 1.67. Chefs Warehouse trailing-twelve-month ROE is 10.90 percent. United Natural Foods, Inc....
Benzinga  May 7  Comment 
Below are the top small-cap drug manufacturers-other stocks on the NYSE and the NASDAQ in terms of PEG ratio. Depomed Inc (NASDAQ: DEPO) has a PEG ratio of 0.43. Depomed's trailing-twelve-month ROE is 61.90 percent. POZEN Inc. (NASDAQ:...
Benzinga  May 6  Comment 
Below are the top mid-cap diversified utilities stocks on the NYSE and the NASDAQ in terms of PEG ratio. PNM Resources Inc (NYSE: PNM) has a PEG ratio of 1.94. PNM Resources' trailing-twelve-month ROE is 6.80 percent. ALLETE Inc (NYSE: ALE)...
Benzinga  May 5  Comment 
Below are the top application software stocks on the NASDAQ in terms of PEG ratio. Sky-mobi Ltd (ADR) (NASDAQ: MOBI) has a PEG ratio of 0.50. Sky-mobi's trailing-twelve-month ROE is 14.40 percent. Materialise NV (ADR) (NASDAQ: MTLS) has a...
Benzinga  May 4  Comment 
Below are the top air delivery & freight services stocks on the NASDAQ in terms of PEG ratio. C.H. Robinson Worldwide, Inc. (NASDAQ: CHRW) has a PEG ratio of 1.96. C.H. Robinson's trailing-twelve-month ROE is 44.80 percent. Forward Air...




 

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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