P/E ratio (PE or P/E ratio for short) refers to the ratio of stock price to earnings per share during an investigation period (usually 12 months), also known as dragging PE. Investors usually use this ratio to estimate the investment value of a stock, or use this indicator to compare the stocks of different companies. "P/E ratio" means P/E ratio; "Price per share" refers to the share price per share; Earnings per share represents earnings per share. That is, the ratio (P/E) between the stock price and the after-tax profit per share of the stock in the previous year is a dynamic indicator to measure the investment value of the stock. Dynamic P/E ratio = static P/E ratio /( 1+ compound annual growth rate) n (n power) Dynamic P/E ratio is a comprehensive consideration of the P/E ratio level of the target enterprise and the future profitability growth. Dynamic P/E ratio refers to the P/E ratio of the forecast profit for the next year that has not yet been realized. Among them, the compound annual growth rate represents the comprehensive growth level of listed companies and needs to be evaluated by various indicators; N is the number of years to evaluate the average compound growth rate of listed companies, and the general institutional forecast is calculated as 3 years. Dynamic P/E ratio is generally much smaller than static P/E ratio, which represents a dynamic change of performance growth or development. printing block
P/E ratio (PE or P/E ratio for short) refers to the ratio of stock price to earnings per share during an investigation period (usually 12 months).
catalogue
brief introduction
Calculation method
Price yield
Edit the introduction of this paragraph.
P/E ratio (PE or P/E ratio for short) refers to the ratio of stock price to earnings per share during an investigation period (usually 12 months), also known as dragging PE. Investors usually use this ratio to estimate the investment value of a stock, or use this indicator to compare the stocks of different companies. "P/E ratio" means P/E ratio; "Price per share" refers to the share price per share; Earnings per share represents earnings per share. That is, the ratio (P/E) between the stock price and the after-tax profit per share of the stock in the previous year is a dynamic indicator to measure the investment value of the stock. Dynamic P/E ratio = static P/E ratio /( 1+ compound annual growth rate) n (n power) Dynamic P/E ratio is a comprehensive consideration of the P/E ratio level of the target enterprise and the future profitability growth. Dynamic P/E ratio refers to the P/E ratio of the forecast profit for the next year that has not yet been realized. Among them, the compound annual growth rate represents the comprehensive growth level of listed companies and needs to be evaluated by various indicators; N is the number of years to evaluate the average compound growth rate of listed companies, and the general institutional forecast is calculated as 3 years. Dynamic P/E ratio is generally much smaller than static P/E ratio, which represents a dynamic change of performance growth or development. Dividend rate listed companies usually distribute part of their profits to shareholders as dividends. Divide the dividend per share of the previous year by the current share price, which is the current dividend rate. If the stock price is 50 yuan, and the dividend per share is 5 yuan last year, the dividend yield is 10%, which is generally high, reflecting that the P/E ratio is low and the stock value is undervalued. Generally speaking, the P/E ratio is 0-13-that is, the value is undervalued14-20-that is, the normal level is 21-28-that is, the value is overvalued by 28+- which reflects that there is a speculative bubble in the stock market and the dividend yield is zero. Because when the P/E ratio is greater than 100 times, it means that it will take investors more than 100 years to recover their capital, and the stock value is overvalued, so they don't pay dividends.
Edit the calculation method of this paragraph
PE (price-earnings ratio) is the ratio of a company's share price to its earnings per share. Its calculation formula is as follows: P/E ratio = price per share/profit per share. Several major securities newspapers and periodicals attach P/E ratios to their daily stock market statements, and the calculation method is: P/E ratio = closing price per share/after-tax profit per share in the previous year. For companies whose total share capital increased from the end of last year due to bonus shares, capitalization of reserve funds and share allotment, their after-tax profit per share will be diluted accordingly according to the changed total share capital. Take Dongda Apai as an example, the after-tax profit per share of the company 198 is 0.60 yuan. In April, 10 shares were converted into 3 shares, and the closing price on June 30th was 43.00 yuan, so the P/E ratio was 43/0.60/( 1+0.3). To price stocks with price-earnings ratio, we need to introduce a "standard price-earnings ratio" for comparison-the price-earnings ratio converted from bank interest rates. After the seventh interest rate cut in June, 1999, China's current one-year time deposit interest rate is 2.25%, that is, the investment is 100 yuan, and the annual income is 2.25 yuan. According to the price-earnings ratio formula, it is 100/2.25 (income) =44.44 (times). Therefore, when the stock price-earnings ratio is lower than the standard price-earnings ratio converted from the bank interest rate, the funds will be used to buy stocks, otherwise the funds will flow to bank deposits, which is the simplest and most intuitive price-earnings ratio pricing analysis.
Edit this paragraph, the price rate of return
In the stock market, when people completely use the P/E ratio to measure the stock price, they will find that the market becomes unreasonable: the P/E ratio of stocks is quite different, which is inconsistent with the bank interest rate; The higher the P/E ratio, the better the market performance. Is the P/E ratio meaningless? Actually, it's not. It's just that investors failed to correctly grasp the understanding and application of P/E ratio. 1. P/E ratio has overall guiding significance to the market. The funds in the market will always flow to places with high yields. As far as the overall average price-earnings ratio of the stock market is concerned, it is basically in line with the bank interest rate level. Before the interest rate cut, the average P/E ratio of China stock market reached 35-40 times, which was on the high side. After seven interest rate cuts, the average price-earnings ratio of the stock market rose to 40 times, which was regarded as a "recovery" rise. 2. To measure the P/E ratio, we should consider the characteristics of the stock market. Compared with bank savings, the stock market has the characteristics of high risk and high return. In addition to dividend income, there are also gains and losses caused by bid-ask spreads. The stock pricing is appropriately higher than the bank deposit standard, which embodies the principle that risk is proportional to income. 3. From a dynamic point of view, the calculation of P/E ratio is based on the profit level of the company in the previous year, and its biggest defect is that it ignores the prediction of the company's future profit. From the point of view of a single company, the P/E ratio is of great reference to public utilities and commercial companies with stable performance, but it is easy to produce judgment bias to companies with unstable performance. Take the Dongda Adi School mentioned above as an example. Because the company has broad market prospects and high growth, it is sought after by investors, and its share price rises and its P/E ratio remains high. However, with the company's annual profit growth rate of 80%, the price-earnings ratio dropped sharply after one year. On the contrary, some listed companies in sunset industries have a current P/E ratio as low as 20 times, but their operating conditions are not good and their profits are declining. If they buy at the current price, the P/E ratio will be extremely high after one year. The high P/E ratio reflects investors' recognition of the company's growth potential to some extent, not only in China stock market, but also in mature voting markets such as Europe, America and Hongkong. From this perspective, it is not difficult for investors to understand why the price-earnings ratio of high-tech stocks approaches or exceeds 100 times, while the price-earnings ratio of motorcycle manufacturing and steel industry is only 20 times. Of course, this does not mean that the higher the price-earnings ratio of stocks, the better. The China stock market is still in its infancy, and the bookmakers arbitrarily raise the stock price, resulting in a very high P/E ratio and huge market risks. Investors should analyze the background and basic quality of the company and make a reasonable judgment on the price-earnings ratio.
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