Price to Earnings Growth

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Benzinga  9 hrs ago  Comment 
Below are the top industrial metals & minerals stocks on the NYSE in terms of PEG ratio. FMSA Holdings Inc. (NYSE: FMSA) has a PEG ratio of 0.31. FMSA Holdings' trailing-twelve-month EPS is $0.88. U.S. Silica Holdings, Inc. (NYSE: SLCA)...
Reuters  9 hrs ago  Comment 
The Swiss National Bank (SNB) spent 25.8 billion Swiss francs ($26.91 billion) defending the currency late last year before abandoning its peg as too costly for the country's economy, it said on Thursday.
Benzinga  Mar 25  Comment 
Below are the top lodging stocks on the NYSE in terms of PEG ratio. Wyndham Worldwide Corporation (NYSE: WYN) has a PEG ratio of 1.67. Wyndham Worldwide's trailing-twelve-month EPS is $4.22. Hyatt Hotels Corporation (NYSE: H) has a PEG...
Benzinga  Mar 24  Comment 
Below are the top catalog & mail order houses stocks on the NYSE and the NASDAQ in terms of PEG ratio. Lands' End, Inc. (NASDAQ: LE) has a PEG ratio of 0.66. Lands' End trailing-twelve-month EPS is $2.71. Liberty Interactive Corporation...
Benzinga  Mar 23  Comment 
Below are the top staffing & outsourcing services stocks on the NASDAQ in terms of PEG ratio. RCM Technologies Inc. (NASDAQ: RCMT) has a PEG ratio of 0.85. RCM Technologies' trailing-twelve-month ROE is 11.40%. Kforce Inc. (NASDAQ: KFRC)...
Benzinga  Mar 13  Comment 
Below are the top mid-cap mortgage investment stocks on the NYSE and the NASDAQ in terms of PEG ratio. Essent Group Ltd. (NYSE: ESNT) has a PEG ratio of 0.52. Essent Group's trailing-twelve-month EPS is $1.03. Nationstar Mortgage Holdings...
Wall Street Journal  Mar 12  Comment 
Denmark’s central bank governor said the bank is committed to defending the krone’s peg to the euro.
Benzinga  Mar 12  Comment 
Below are the top air services, other stocks on the NYSE and the NASDAQ in terms of PEG ratio. PHI Inc. (NASDAQ: PHIIK) has a PEG ratio of 0.49. PHI's trailing-twelve-month EPS is $2.08. AerCap Holdings N.V. (NYSE: AER) has a PEG ratio of...
Benzinga  Mar 11  Comment 
Below are the top rubber & plastics stocks on the NYSE and the NASDAQ in terms of PEG ratio. The Goodyear Tire & Rubber Company (NASDAQ: GT) has a PEG ratio of 0.26. Goodyear Tire & Rubber's trailing-twelve-month ROI is 31.60%. Tredegar...
Benzinga  Mar 10  Comment 
Below are the top electronic equipment stocks on the NYSE and the NASDAQ in terms of PEG ratio. Fabrinet (NYSE: FN) has a PEG ratio of 0.91. Fabrinet's trailing-twelve-month ROE is 18.00%. Apple Inc. (NASDAQ: AAPL) has a PEG ratio of 1.34....




 

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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