5 Value Stocks With Low Price-to-Earnings Ratios: Chevron, Unum, Aflac, More Check out these five companies with the lowest price-to-earnings ratios of all companies reviewed by ModernGraham.com. Benjamin Clark May 30, 2014 3:49 PM EDT NEW YORK (TheStreet) -- How should investors pick among the great companies in the market today?
| Company | Current Price | PE Ratio |
|---|---|---|
| DHC Diversified Healthcare Trust | $1.84 -2.9% | 0.90 |
| STG Sunlands Technology Group | $4.97 -2.4% | 0.94 |
| LBTYK Liberty Global | $22.19 -1.9% | 0.96 |
| X United States Steel | $16.91 -5.6% | 0.98 |
What companies have the highest earnings?
- Dividend yield greater than 3% (indicates high dividend payments),
- Dividend payout ratio less than 100% (indicates the Company isn’t paying more than 100% of its income in dividends),
- Marketcap over $200 million (more stable companies),
- EPS growth greater than 5% (continuing to grow operations),
What is a good PE ratio for a stock?
- The value of P/E ratio
- Seeing the bigger picture
- Predictive power of P/E ratio
What earnings per share (EPS) tells investors?
- In which direction is EPS moving? ...
- How much is EPS expected to move over the next year or two?
- How much investment was required by the company to generate the earnings?
- Is the company doing anything to change the calculation, such as increasing shares (perhaps through stock and options grants to executives)?
What is low PE ratio?
The P/E ratio, or price-to-earnings ratio, is a quick way to see if a stock is undervalued or overvalued — and generally speaking, the lower the P/E ratio is, the better it is for the business and for potential investors. The metric is the stock price of a company divided by its earnings per share. You shouldn’t compare P/E ratios of different kinds of companies, like a tech company and a consumer staple company.
What are the best PE ratio stocks?
High PE Ratio StocksCompanyCurrent PriceAverage VolumeLI Li Auto$37.70 -1.6%10.58 millionEDR Endeavor Group$21.83 +6.2%1.33 millionFRPH FRP$62.13 +2.9%10,579SWCH Switch$33.45 -0.1%2.62 million39 more rows
Are stocks with low PE ratio a good investment?
Many investors will say that it is better to buy shares in companies with a lower P/E because this means you are paying less for every dollar of earnings that you receive. In that sense, a lower P/E is like a lower price tag, making it attractive to investors looking for a bargain.
Should I buy high or low PE ratio?
P/E ratio, or price-to-earnings ratio, is a quick way to see if a stock is undervalued or overvalued. And so generally speaking, the lower the P/E ratio is, the better it is for both the business and potential investors. The metric is the stock price of a company divided by its earnings per share.
Which company PE ratio is low today?
low pe stocksS.No.NameROCE %1.Standard Inds.254.112.EKI Energy236.483.Kwality Pharma158.674.Chennai Ferrous157.9822 more rows
What is the key ratio for investing in stocks?
When investing in stocks, one of the key ratios that is used is the price-to-earnings (P/E) ratio. In simple terms, this tells an investor how much they are paying to purchase $1 or a company’s earnings.
What does a PEG of 1 mean?
However, the accepted rule among investors is that a PEG of greater than 1 is considered to indicate a stock price that is too high based on expected earnings growth. A PEG of less than 1 is considered to indicate a stock that is undervalued based on projected earnings growth.
Is P/E a good investment?
However, while the P/E ratio can show a company as a good investment, it doesn’t take into account future earnings. This is why many investors have come to supplement the P/E ratio with another measurement tool the price-to-earnings growth (or PEG) ratio.
Is PEG more accurate than P/E?
To that end, the PEG is considered to be more accurate than simply looking at a company’s P/E ratio when determining proper valuation. For example, by definition, a high P/E ratio typically signals to investors that a stock is overvalued.
Why is it better to buy shares with a lower P/E?
Many investors will say that it is better to buy shares in companies with a lower P/E, because this means you are paying less for every dollar of earnings that you receive. In that sense, a lower P/E is like a lower price tag, making it attractive to investors looking for a bargain.
What are the two types of P/E ratios?
These two types of EPS metrics factor into the most common types of P/E ratios: the forward P/E and the trailing P/E. A third and less common variation uses the sum of the last two actual quarters and the estimates of the next two quarters.
What is the inverse of the P/E ratio?
The inverse of the P/E ratio is the earnings yield (which can be thought of like the E/P ratio). The earnings yield is thus defined as EPS divided by the stock price, expressed as a percentage.
What does a high P/E mean?
A high P/E could mean that a stock's price is high relative to earnings and possibly overvalued.
What is the P/E ratio?
The price-to-earnings ratio or P/E is one of the most widely-used stock analysis tools used by investors and analysts for determining stock valuation. In addition to showing whether a company's stock price is overvalued or undervalued, the P/E can reveal how a stock's valuation compares to its industry group or a benchmark like the S&P 500 Index.
What is an individual company's P/E ratio?
An individual company’s P/E ratio is much more meaningful when taken alongside P/E ratios of other companies within the same sector. For example, an energy company may have a high P/E ratio, but this may reflect a trend within the sector rather than one merely within the individual company. An individual company’s high P/E ratio, for example, would be less cause for concern when the entire sector has high P/E ratios.
What does N/A mean in P/E?
A company can have a P/E ratio of N/A if it's newly listed on the stock exchange and has not yet reported earnings, such as in the case of an initial public offering (IPO), but it also means a company has zero or negative earnings, Investors can thus interpret seeing "N/A" as a company reporting a net loss.
Why are stocks so cheap?
Sometimes, stocks appear cheap on the surface because they have low P/E ratios, but amount to value traps as the business model is deteriorating. In addition to low P/E ratios, the 10 stocks on this list also have positive future growth potential, and in many cases pay dividends to shareholders.
What is the most common valuation metric?
While there are many ways to value stocks, the most common valuation metric is the price-to-earnings ratio, otherwise referred to as the P/E ratio.
What is value investing?
Value investing is a broad term, and can mean different things to different investors. Value investors typically look for cheap stocks, although there is no single definition of what constitutes a cheap stock. Generally, value investors look for stocks that are trading below intrinsic value. This is the basic philosophy adhered to by Warren ...
Why is my P/E ratio low?
If a stock's P/E ratio is relatively low compared to similar stocks, that can be a sign that it's undervalued, meaning that it's potentially a good place to invest your money . It's always worth looking at factors that may be causing the P/E ratio to appear low, however, as it may be a sign that earnings are likely to fall in the future.
What does low P/E mean?
Note that a low P/E ratio doesn't always mean that a stock is undervalued, since it may be that investors are factoring in warning signs that indicate lower earnings or other troubles in the future. Do your research before you buy and sell stocks based on a single factor like P/E ratio alone. A low P/E ratio meaning a bargain is very different ...
Why do startups have high P/E?
In particular, startups often have high P/E ratios relative to more established companies because investors are factoring in the likelihood of high future earnings, not just the earnings that have been reported to date. Note that a low P/E ratio doesn't always mean that a stock is undervalued, since it may be that investors are factoring in warning ...
What is free cash flow?
Free cash flow is defined as the net cash generated from operations, known as operating cash flow, minus what the company invests in capital expenditures such as buying real estate and durable equipment like manufacturing hardware or computers.
What is the market value of a company?
Market value, or market value of invested capital, is the total amount of all investment in the company, including debt, so it's a slightly different number than simply the price of the company's stock.
What is enterprise value?
Enterprise value is the total value of a company's stock, including all types of shares, and the market value of its outstanding debt, usually subtracting any cash that it has on hand since this isn't part of the core business. It's essentially the value that someone would have to pay to own the company in full, since a buyer would need to pay all the outstanding debt and buy all the stock in order to take ownership of the business.
How to calculate P/E ratio?
The price-to-earnings, or P/E, ratio is computed by dividing a stock's share price by its earnings per share. You can look up these numbers on a brokerage or financial news site and compute it yourself, and many such sites also list the P/E ratio along with the other numbers.
