What is a good PE ratio for stocks? (2024)

What is a good PE ratio for stocks?

Typically, the average P/E ratio is around 20 to 25. Anything below that would be considered a good price-to-earnings ratio, whereas anything above that would be a worse P/E ratio. But it doesn't stop there, as different industries can have different average P/E ratios.

What is considered a good PE ratio for a stock?

To give you some sense of what the average for the market is, though, many value investors would refer to 20 to 25 as the average P/E ratio range. And again, like golf, the lower the P/E ratio a company has, the better an investment the metric is saying it is.

Is 0.5 a good PE ratio?

The ratio is calculated by dividing the price-earnings ratio by the sum of the earnings growth rate and the dividend yield. With this modified technique, ratios above one are considered poor, while ratios below 0.5 are considered attractive.

Is a PE ratio of 50 good?

In the heat of a bull market, it's not uncommon to find "hot" stocks trading at a P/E of 50 or more. While this can go on for some time, eventually the stock's price may drop.

What is the average PE ratio by industry?

What is Amazon's PE ratio?

P/E ratio as of April 2024 (TTM): 89.1

According to Amazon's latest financial reports and stock price the company's current price-to-earnings ratio (TTM) is 89.0969. At the end of 2022 the company had a P/E ratio of -313.

What is the PE ratio of Apple?

As at Apr 22, 2024, the AAPL stock has a PE ratio of 25.67. This is based on the current EPS of $6.46 and the stock price of $165.84 per share. A decrease of 13% has been seen in the P/E ratio compared to the average of 29.5 of the last 4 quarters.

What is a 2.5 PE ratio?

P/E ratio example

Now, if another company in the same industry also has a share price of $50 but an EPS of $20, its P/E ratio would be 2.5, meaning it would cost $2.50 to purchase $1 of that company's earnings. The second company is the better value, in theory, if all other variables are equal.

Is 3.5 a good PE ratio?

There's no "good" P/E, but 10-20 is usually considered fairly valued. <10 is usually considered undervalued and >20 is usually considered overvalued, though it really depends on the industry. Compare the company to its industry peers to determine if its P/E is fair. 2 comments.

Is 30 a bad PE ratio?

P/E 30 Ratio Explained

A P/E of 30 is high by historical stock market standards. This type of valuation is usually placed on only the fastest-growing companies by investors in the company's early stages of growth. Once a company becomes more mature, it will grow more slowly and the P/E tends to decline.

What is the current PE ratio of the S&P 500?

S&P 500 P/E Ratio is at a current level of 24.79, up from 23.27 last quarter and up from 22.23 one year ago. This is a change of 6.51% from last quarter and 11.53% from one year ago.

How do you know if a stock is overvalued?

A high P/E ratio may indicate overvaluation, as it suggests that investors are willing to pay a premium for each dollar of earnings generated. Comparing a company's P/E ratio to its historical average or industry peers can provide insights into whether the stock is trading at a higher valuation.

What if PE ratio is 100?

PE ratio = Price/Earnings

If a company has a high P/E ratio, investors are willing to pay a significant price for each rupee of profit the company makes. For example, if XYZ stock has a P/E ratio of 100, it means that investors are willing to pay Rs. 100 for every Rs.

What is Coca Cola's average PE ratio?

Coca-Cola's p/e ratio for fiscal years ending December 2019 to 2023 averaged 27.8x. Coca-Cola's operated at median p/e ratio of 28.3x from fiscal years ending December 2019 to 2023. Looking back at the last 5 years, Coca-Cola's p/e ratio peaked in December 2019 at 30.6x.

Why is Costco PE ratio so high?

Strong customer loyalty, profitable store growth, and consistently higher profitability have led to an ever-increasing share price. That means you'll pay up to buy the shares. Costco's price-to-earnings (P/E) ratio stands at 49. That's much higher than the S&P 500's P/E multiple of 27.

Which industry has the highest PE ratio?

What does Warren Buffett say about PE ratio?

Warren Buffett wrote “Common yardsticks such as dividend yield, the ratio of price to earnings or to book value, and even growth rates have nothing to do with valuation except to the extent they provide clues to the amount and timing of cash flows into and from the business.”

Is Google's PE ratio good?

GOOGL PE ratio history

The PE ratio of Alphabet has averaged 28.88 over the last ten years. The current price-to-earnings ratio of 26.39 is 9% less than the historical average.

What is the PE ratio for Walmart?

P/E ratio as of April 2024 (TTM): 11.4

According to Walmart's latest financial reports and stock price the company's current price-to-earnings ratio (TTM) is 11.3525. At the end of 2022 the company had a P/E ratio of 14.5.

What is the PE ratio of Costco?

As of today (2024-04-20), Costco Wholesale's share price is $709.51. Costco Wholesale's Earnings per Share (Diluted) for the trailing twelve months (TTM) ended in Feb. 2024 was $15.29. Therefore, Costco Wholesale's PE Ratio for today is 46.40.

What is Tesla's forward PE ratio?

Tesla's p/e ratio (fwd) is expected to average 29.4x over the next 5 fiscal years. Tesla's is expected to deliver median p/e ratio (fwd) of 29.7x over the next 5 fiscal years.

What is Tesla's max PE ratio?

The average historical PE ratio of Tesla for the last four years is 268.36. The current P/E ratio of 36.91 is 86% lower than the historical average. Looking back at the last four years, TSLA's PE ratio peaked in the Dec 2020 quarter at 940.89, when the price was $235.22 and the EPS was $0.25.

Is PE ratio below 5 good?

Very low vs very high PE ratios

It is arguable that a PE of five or less is not a remarkable bargain. While it might look as if the company's prospects are being viewed too negatively, it is not a bad rule of thumb to filter out companies with a PE below this level.

What if PE ratio is 0?

A Price-to-Earnings (PE) ratio becoming zero for a stock typically indicates a situation where the company is reporting negative earnings. The PE ratio is calculated by dividing the current market price of a stock by its earnings per share (EPS).

What is a good dividend yield?

What Is a Good Dividend Yield? Yields from 2% to 6% are generally considered to be a good dividend yield, but there are plenty of factors to consider when deciding if a stock's yield makes it a good investment. Your own investment goals should also play a big role in deciding what a good dividend yield is for you.