Price to Earnings Growth

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Benzinga  11 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 0.39. FMSA Holdings' trailing-twelve-month revenue is $1.36 billion. U.S. Silica Holdings Inc (NYSE:...
Benzinga  Apr 22  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 1.92. PNM Resources' trailing-twelve-month revenue is $1.44 billion. NRG Energy Inc ...
Benzinga  Apr 21  Comment 
Below are the top accident & health insurance stocks on the NYSE in terms of PEG ratio. Employers Holdings, Inc. (NYSE: EIG) has a PEG ratio of 0.86. Employers Holdings' trailing-twelve-month revenue is $773.50 million. Triple-S Management...
Benzinga  Apr 20  Comment 
Below are the top mid-cap chemicals-major diversified stocks on the NYSE and the NASDAQ in terms of PEG ratio. Minerals Technologies Inc (NYSE: MTX) has a PEG ratio of 1.12. Minerals Technologies' trailing-twelve-month revenue is $1.73...
Benzinga  Apr 10  Comment 
Below are the top small-cap industrial equipment & components stocks on the NYSE and the NASDAQ in terms of PEG ratio. Standex International Corporation (NYSE: SXI) has a PEG ratio of 1.50. Standex International's trailing-twelve-month revenue...
Clusterstock  Apr 10  Comment 
HONG KONG (Reuters) - The Hong Kong stock exchange expects to increase quotas for mainland China investors by more than 30 percent, its chief executive said, a day after heavy capital inflows from the mainland forced the city's central bank to...
Benzinga  Apr 9  Comment 
Below are the top air delivery & freight services stocks on the NASDAQ in terms of PEG ratio. Forward Air Corp. (NASDAQ: FWRD) has a PEG ratio of 1.85. Forward Air's trailing-twelve-month revenue is $781.00 million. Expeditors International...
Benzinga  Apr 8  Comment 
Below are the top water utilities stocks on the NASDAQ in terms of PEG ratio. Consolidated Water Co. Ltd. (NASDAQ: CWCO) has a PEG ratio of 3.24. Consolidated Water's trailing-twelve-month revenue is $65.60 million. Connecticut Water...
The Economic Times  Apr 7  Comment 
"Gross Domestic Saving rate is projected at 30 per cent of GDP in 2014-15 and is expected to improve to 31 per cent of GDP in 2015-16," the survey said.
Benzinga  Apr 7  Comment 
Below are the top mid-cap application software stocks on the NYSE and the NASDAQ in terms of PEG ratio. SolarWinds, Inc. (NYSE: SWI) has a PEG ratio of 2.16. SolarWinds' trailing-twelve-month revenue is $428.70 million. Open Text...




 

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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