How the Peg Ratio Can Help Uncover Value Stocks

The PEG ratio, measures the price-to-earnings to growth of a stock. It is a very helpful tool for researching value stocks. It compares favourably to the popular P/E ratio as well. The P/E ratio compares the stock’s price to trailing earnings, and is a generally helpful metric for assessing a company. Estimated future earnings are also good for stock assessment. The PEG ratio however, takes both factors into account, the past earnings of a stock, in comparison to the price, with expectations of future earnings. This helps with a much more holistic and clear assessment of a value stock.

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