P/E Ratio

A price-to-earnings-ratio (P/E ratio or PER) is a stock market indicator which shows the relation between the market price of a stock and the per-stock profit of the issuing company.

In an alternative calculation, the entire market capitalization of a company is divided by its annual earnings.

Simply put: The lower a stock’s price-to-earnings-ratio, the more attractive that stock is.

You can find out more about P/E ratios here.

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