What is the PEG Ratio? | Price Per Earnings to Growth Ratio Explained!
Channel: Wealth Giants with Ryan
Date: 2020-08-17

The videos,
PE ratio - https://youtu.be/bDzqTNe2qcc
8 things I look for in a company - https://youtu.be/1jCvkSYT7l0
Forward and trailing PE ratios - https://youtu.be/hj9Ls8LpL_o

Hello Wealth Giants and thank you for watching my video,

In this video,

Is a stock market vocabulary video. I will go over the Peg ratio in this video. The peg ratio meaning is a variable that should be considered when you are investing in stocks. The peg ratio means "Price Per Earnings to Growth Ratio." 

I will go over,

The PEG Ratio meaning
The peg ratio calculation
What a good peg ratio is and how to use it
And, the warnings of the peg ratio

Investing vocabulary is in my mind an important fundamental behind investing. Investing for beginners is challenging and sometimes overwhelming. The intent of me making a video like this is to not leave new investors behind. The intent of getting the peg ratio explained is to get people familiar with the basics of the stock market.

The price/earnings to growth (peg) ratio is an extension of the pe ratio. It allows you to compare the rate of growth of a company to the value of the companies (the p/e ratio). To calculate the geg ratio you simply take the pe ratio and divide it by the % growth of the EPS and that gives the PEG ratio. A Peg ratio of 1.0 is considered fair value where a Peg ratio of greater than 1.0 is overvalued and less than one is undervalued. Don't just use this though. The best way to use the peg ratio is to compare the peg ratio to its competitors. Warnings of the peg ratio include. It is a ratio that events outside the control of the company can change and analysts can be wrong. Second, Hype can change the value of a company in a positive or negative way, and third, The peg ratio is only one variable out of many so look at everything.

Hope this helps!

Enjoy,

Wealth Giants with Ryan

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