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The PE ratio is a valuation metric that compares a company's price-earnings ratio with its projected growth rate. Small, high-growth stocks generally trade at higher PE's compared to the Large-caps. If the PE ratio is around 1, the company is considered fairly valued. A PE ratio that is much higher than 1 indicates an overvalued company, and a PE below 1 indicates an undervalued company. While the PE ratio can effectively provide insight in certain evaluations, it is limited by its overriding focus on earnings growth. Revenue growth, cash flow, dividends, debt, and numerous other factors are also critical in determining value. Additionally, while PE is useful for smaller companies it may be misleading for big-caps, since sustained growth is less important to their total returns. PE is most useful when supplementing a thorough discounted cash flow analysis or relative valuation.
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Where can you find historical p e ratios for stocks?
ycharts.com
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Does s and p 500 pay dividends?
The S&P is an index. It is made up of 500 of the largest US companies. As an index it does not pay a dividend although ETFs and mutual fund investments designed to track the S&P 500 do often pay a dividend. This is possible because many of the 500 companies in the index pay a dividend. The dividends can be pooled and the passed on to investors of the funds. The most common example is ticker symbol SPY.
How to Tell if a Stock is Overpriced?
Have you ever been listening to analysis on an individual stock and heard the analyst say they believed the share price was too high? How do analysts tell if a company’s stock is overpriced? Mostly they use complicated metrics that are beyond the scope of this blog, but one simple tool that you can use, and one that’s still relevant to those stock analysts is the P/E ratio. P/E ratio, or Price to Earnings ratio, compares the stock price to the earnings per share of the company. The earnings per share is a measure of how much the company’s earnings are per share of stock outstanding. In essence then, if the P/E ratio was 15, it’d mean that the company’s stock was trading at 15 times earnings. In this example the EPS (earnings per share) would only be 1/15 of the share price. One reason that P/E ratio is a good measure of whether the stock is overpriced is that if the ratio is high, you’re paying a whole lot for mediocre performance. Or the company may have good performance but be overbought due to market hysteria or some sort of bubble. Industries and sectors of the market all tend to be grouped within a narrow range of typical P/E results. If you compare an energy company to another similar energy company, you’ll most likely find that their P/E ratios are similar. So one measure of whether a particular stock is overpriced would be to compare its P/E ratio to that of other similar companies. This tool should be added to your toolbox; but it shouldn’t be used in a vacuum. Remember to do thorough research on any company before deciding to purchase shares of its stock. The P/E ratio can help you avoid overpaying for an investment, but it cannot tell the whole story of what’s going on within the company, the economy, that individual sector, or the market as a whole. While the P/E can help you identify stocks that are overpriced, it is also useful to help you spot a potential bargain. But again, sometimes the P/E may be low because a strong company is overlooked by the market – other times there will be other reasons why that metric dips below the average for its sector. Do your research, but make sure that P/E is included in the screens that you use when evaluating individual stocks.
Where can you find historical stock quotes with historical pe - price to earnings - ratios?
You can find some info from S&P stock reports. They would give yearly high/lows of P/E. They provide the information for the last 10 yrs (only in a yearly format). Often you can access the S&P reports from your broker (such as Scottrade). I'm not sure where you can find daily information.
Is a high P E ratio better than a low P E ratio?
No. A higher P E ratio can result in much better results than a lower P E ratio, but it is a lot riskier. Meaning a higher risk of loss for the higher P E ratio.
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Ronald P. M. Giammarino has written: 'Capital investment challenges in Canada' -- subject(s): Capital investments, Investments
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What is an acceptable price earnings ratio?
An price to earnings (P/E) ratio shows the number of years to cover the initial capital spent in an equity investment. There is no real acceptable, and therefore unnacceptable P/E ratio, and depends on each investors personal expectations or goals. Except that generally a higher P/E ratio is better than a lower P/E ratio, for obvious reasons.
The odds in favor of an event are 10 to1 ratio Find the probability that the event will occur?
If the odd favoring an event are 10 to 1, then the probability of the event occurring is 0.9. The odds in favor of an event are 10:1. Find the probability that the event will occur. ---- P(E)+P(E') = 1 --- P(E)/P(E') = 10/1 So P(E) = 10P(E') ---- Substitute for P(E) and solve for P(E'): 10P(E')+P(E') = 1 11P(E') = 1 P(E') = 1/11 --- Therefore P(E) = 10/11
N E P?
What is N E P?
