Send me real-time posts from this site at my email

Price to Earnings: What the P/E Ratio Says About a Stock (And What It Doesn’t)

P/E ratio

The price-to-earnings ratio can help investors assess a stock’s value, albeit with limitations.

Some people are “numbers people,” meaning they like when they can solve problems with a concrete number. A numbers person might be attracted to the price-to-earnings ratio, since it’s a mathematical formula to help assess the value of a company’s stock. This ratio can illustrate how much investors are paying for each dollar of earnings.

Unfortunately for people looking for a numbers-only answer, the ratio alone doesn’t...See more

Welcome! Is it your First time here?

What are you looking for? Select your points of interest to improve your first-time experience:

Apply & Continue