Using Price to Earnings Ratio in the Stock Market | Stock Market Tips for Investing and Trading

in #steemit8 years ago

The price to earnings ratio is frequently used in the investing world.

It essentially tells you how expensive a stock is. For example, lets say Walmart's stock is trading at a p/e multiple of 10. This simply means that for every $1 Walmart earns you are willing to pay $10.

Stocks like Netflix and Amazon have extremely high p/e multiples because investors are willing to pay more for a company that is growing.

Stocks like AT&T and Walmart have low p/e multiples because investors are expecting steady profits.

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Great read and for sure jotting these tips down