Price to Earnings Growth

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Benzinga  Dec 17  Comment 
Below are the top small-cap agricultural chemicals stocks on the NYSE and the NASDAQ in terms of PEG ratio. China Green Agriculture (NYSE: CGA) has a PEG ratio of 0.16. China Green Agriculture's trailing-twelve-month ROE is 7.10%. CVR...
Benzinga  Dec 16  Comment 
Below are the top mid-cap apparel stores stocks on the NYSE and the NASDAQ in terms of PEG ratio. Urban Outfitters (NASDAQ: URBN) has a PEG ratio of 1.36. Urban Outfitters' trailing-twelve-month EPS is $1.81. DSW (NYSE: DSW) has a PEG ratio of...
Benzinga  Dec 15  Comment 
Below are the top diversified utilities stocks on the NYSE in terms of PEG ratio. NextEra Energy Partners, LP (NYSE: NEP) has a PEG ratio of 1.66. NextEra Energy Partners' trailing-twelve-month revenue is $282.60 million. UGI (NYSE: UGI) has a...
Benzinga  Dec 5  Comment 
Below are the top mid-cap information & delivery stores stocks on the NYSE and the NASDAQ in terms of PEG ratio. Broadridge Financial Solutions (NYSE: BR) has a PEG ratio of 1.87. Broadridge Financial's trailing-twelve-month EPS is...
Benzinga  Dec 4  Comment 
Below are the top mid-cap discount, variety stores stocks on the NYSE and the NASDAQ in terms of PEG ratio. Big Lots (NYSE: BIG) has a PEG ratio of 1.99. Big Lots' trailing-twelve-month EPS is $2.08. PriceSmart (NASDAQ: PSMT) has a PEG ratio...
Benzinga  Dec 3  Comment 
Below are the top small-cap air services, other stocks on the NYSE and the NASDAQ in terms of PEG ratio. PHI (NASDAQ: PHIIK) has a PEG ratio of 0.51. PHI's trailing-twelve-month EPS is $2.69. Air Methods (NASDAQ: AIRM) has a PEG ratio of 1.10....
Benzinga  Dec 2  Comment 
Below are the top small-cap air delivery & freight services stocks on the NYSE and the NASDAQ in terms of PEG ratio. Roadrunner Transportation Systems (NYSE: RRTS) has a PEG ratio of 0.87. Roadrunner's trailing-twelve-month EPS is...
Benzinga  Dec 1  Comment 
Below are the top small-cap broadcasting-radio stocks on the NYSE and the NASDAQ in terms of PEG ratio. Beasley Broadcast Group (NASDAQ: BBGI) has a PEG ratio of 1.22. Beasley Broadcast's trailing-twelve-month revenue is $67.40 million. Emmis...
Benzinga  Nov 26  Comment 
Below are the top stocks in the utilities sector in terms of PEG ratio. Calpine (NYSE: CPN) has a PEG ratio of 0.39. Calpine's trailing-twelve-month ROE is 18.60%. Korea Electric Power (NYSE: KEP) has a PEG ratio of 0.50. Korea Electric...




 

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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