Profit return rate
PE = price/earnings per share (price \ earnings per share)
P/E ratio PE is divided into static P/E ratio PE and dynamic P/E ratio PE:
Static PE= share price/earnings per share (EPS) (year) Dynamic PE= share price * total share capital/net profit for the next year (you need to make your own prediction)
The P/E ratio relates the stock price to the profit, which reflects the recent performance of the enterprise. If the stock price rises, but the profit remains the same, or even falls, the P/E ratio will rise.
Generally speaking, the price-earnings ratio is:
14-20: Normal level
2 1-28: the value is overvalued
28+-: There is a speculative bubble in the stock market
Price-earnings ratio of stock market
Dividend yield
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 dividend yield of stocks with extremely high P/E ratio (such as 100 times or more) 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.