For example, Company A makes in-line skates and has a PE of 8. Company B makes in-line skates and has a PE of 14. The rule of thumb has more or less been that a company with a lower PE is a more attractive buy, but sometimes it pays to dig deeper. As you can see, PE is useful, but it is only one measure of many. Beta is not always shown when you look up a stock's history.
Beta is the measure of a stock's movement relative to the movement of the market.
If, on the other hand, the stock is climbing very quickly, let's say 20 to 30 percent over a short period of time, while the market in general is only going up 4 percent, the beta will be more than one and the stock will be more volatile than the market. When the stock has a beta of less than one, it means that the stock is not moving as fast as the market. When you are looking at the beta of a stock, it is helpful to look at it against the whole market, but it is more important to look at the beta within the industry. For example, if you are looking at pharmaceutical companies, you need first to determine the average beta value for the sector as a whole. You then determine the beta of the companies you are researching.