What does the price earnings ratio mean for a stock?

Lexington financial planner Raymond James says the price to earnings ratio is simply the stock price-divided by the earnings per share of the company over a twelve month period.

The price earnings ratio shows what investors are willing to pay for each dollar a company earns. It is the basic valuation for a company stock price.

Companies that have a higher price to earnings ratio typically are expected to grow their earnings faster.

Comments are posted from viewers like you and do not always reflect the views of this station.
powered by Disqus


2851 Winchester Rd. Lexington, Ky 40509 859-299-0411 - switchboard 859-299-2727 - newsroom
Register for Email
RSS Feeds
Copyright © 2002-2015 - Designed by Gray Digital Media - Powered by Clickability 49433367 - wkyt.com/a?a=49433367
Gray Television, Inc.