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.
Conventionally, a PB ratio of below 1.0, is considered indicative of an undervalued stock. Some value investors and financial analysts also consider any value under 3.0 as a good PB ratio. However, the standard for “good PB value” varies across industries.
PB ratio > 1 usually implies that the market price is trading at the company's book value premium. It could mean that the stock is overvalued and has high future growth. Conversely, a low PB ratio indicates that the market has relatively low expectations for the company's prospects.
Usually, the market considers a P/E ratio below 20 as a good investment opportunity. 3. What if PE ratio is 40? A high P/E ratio, above 40, indicates investors willing to buy a stock at 40 times or more its earnings.
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.
Apple (AAPL) PE Ratio (TTM) : 38.55 (As of Jan. 14, 2025)
A healthy blood pressure reading should be lower than 120/80 mmHg. Normal blood pressure is less than 120 mmHg systolic and 80 mmHg diastolic (see blood pressure chart below), and may vary from 90/60mmHg to 120/80mmHg in a healthy young woman.
The corporations are formed with a face value of INR 10, but most have a face value of INR 100 or INR 1. SEBI, which governs the requirements for listing a public limited company on a stock exchange, has established a minimum face value of INR 1.
The P/B ratio is favored by value investors for its usefulness in identifying undervalued companies. The average P/B ratio for banking firms, as of the first quarter of 2021, is approximately 1.28.
Buffett's Strategy
Warren Buffett, the greatest value investor of this century, now tends to buy stocks with a P/B ratio of around 1.3.
A P/B ratio that's greater than one suggests that the stock price is trading at a premium to the company's book value. For example, if a company has a price-to-book value of three, it means that its stock is trading at three times its book value. As a result, the stock price could be overvalued relative to its assets.
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.
Traditionally, any value under 1.0 is considered desirable for value investors, indicating an undervalued stock may have been identified. However, some value investors may often consider stocks with a less stringent P/B value of less than 3.0 as their benchmark.
According to Tesla's latest financial reports and stock price the company's current price-to-earnings ratio (TTM) is 118.273. At the end of 2022 the company had a P/E ratio of 30.6.
Face value itself does not determine a stock's worth or its potential for returns. Investors often wonder if buying shares with a lower face value (like ₹1) is better than those with a higher face value (like ₹10).
A good BVPS is typically higher than the current market price of the shares, indicating that the shares may be undervalued and have potential for profit. However, this should be considered alongside other factors like industry trends, company growth prospects, and overall market conditions.
ROE is calculated by dividing net profit by net worth. If the company's ROE turns out to be low, it indicates that the company did not use the capital efficiently invested by the shareholders. Generally, if a company has ROE above 20%, it is considered a good investment.
Adams 100% Natural Peanut Butter
As one of the healthiest peanut butter options on the market, Adams is also non-GMO and certified organic. This healthy peanut butter only contains two ingredients, roasted peanuts and a dash of salt, making it rich and creamy, but not too sweet.
The main difference between PE (Price-to-Earnings) and PB (Price-to-Book) is that PE compares a company's stock price to its earnings per share, indicating future earnings potential, while PB compares stock price to book value per share, reflecting the company's actual asset value.
A low blood pressure reading is usually good. Some people with very low blood pressure have a condition called hypotension. This occurs when blood pressure is less than 90/60 mm Hg. Low blood pressure is usually not harmful unless there are other symptoms that concern a health care professional.
Average PE of Nifty in the last 20 years was around 20. * So PEs below 20 may provide good investment opportunities; lower the PE below 20, more attractive the investment potential.
The mean historical PE ratio of Costco Wholesale over the last ten years is 35.42. The current 54.17 P/E ratio is 53% higher than the historical average. Looking back at the last ten years, COST's PE ratio peaked in the Nov 2024 quarter at 56.47, with a price of $964.01 and an EPS of $17.07.
The PE ratio for Amazon Com stock stands at 45.9 as of Jan 10, 2025. This is calculated based on the TTM EPS of $4.77 and the stock price of $218.94 per share.