When it comes to valuing stocks, the pricetoearnings (P/E) ratio is one of the oldest and most frequently used metrics. It is calculated by taking a company's share price and dividing this by its earnings per share. This provides a measure of the price being paid for the earnings  the higher the P/E, the more expensive the earnings. However, a company's standalone P/E doesn't give us a full picture of how expensive a stock is unless we look at it relative to the company's industry or a broad market index such as the S&P 500 and the Dow Jones Industrial Average (DJIA).
You can find an industry's P/E by analyzing industry statistics through finance websites such as Yahoo! Finance. If your company's P/E differs greatly from the industry's, you should investigate why there is a difference. If a company's P/E is twice as large as the industry's, this means investors should proceed cautiously, because no company can grow faster than the overall industry forever.
The P/E of an index  the total price of the index divided by its total earnings  is a little more difficult to come upon. Many financial websites have P/Es for individual companies, but not for indexes like the DJIA or S&P 500. To get this information, you have to go straight to the source  the index's publishers. For example, you can find the P/E for the S&P 500 on the Standard & Poor's website and for the DJIA on the Dow Jones website.
Another way to get an estimate of the P/E ratio is to look at the P/E ratio of an exchangetraded fund (ETF), which closely follows the index in question. While this measure is not as exact as the index's own measure, the information is a lot easier to find. For example, the P/E for the Wilshire 5000 can be obtained through VIPERS or the Nasdaq 100. This will work with the DJIA and the S&P 500 as well.
Again, the P/E found on an ETF will not be exactly the same as the P/E of the index. This discrepancy is due to the fees charged on an ETF, along with the fact that ETFs are traded on the stock market. Fluctuations in the price of the ETF are affected by both the underlying index and the regular price movement of the ETF, which acts like a stock. However, the return on an ETF is often very close to the index's return.
(For further reading, see Understanding the P/E Ratio and Introduction To ExchangeTraded Funds.)

How can I find the P/E ratio on an ETF's underlying index?
Learn how analysts and investors can determine the pricetoearnings ratio for the underlying index of an exchangetraded ... Read Answer >> 
What's the difference between absolute P/E ratio and relative P/E ratio?
The simple answer to this question is that absolute P/E, which is the most quoted of the two ratios, is the price of a stock ... Read Answer >> 
What does the forward p/e indicate about a company?
Explore the forward price to earnings ratio and learn its significance and how it compares to the traditional price to earnings ... Read Answer >> 
How can the pricetoearnings (P/E) ratio mislead investors?
A low P/E ratio doesn't automatically mean a stock is undervalued, just like a high P/E ratio doesn't necessarily mean it ... Read Answer >> 
What is the average pricetoearnings ratio in the banking sector?
Explore the price/earnings ratio in regard to the banking industry and learn what the average P/E ratio is for most banking ... Read Answer >> 
What is an alternative ratio to forward p/e?
Discover the most commonly used alternative equity evaluation ratio to the forward P/E ratio, and the relative advantages ... Read Answer >>

Investing
Differences Between Forward P/E And Trailing P/E
The most common types of price to earnings ratios are forward P/E and trailing P/E. Find out how they differ and the advantages and drawbacks of each. 
Investing
Beware False Signals From The P/E Ratio
The P/E ratio is a simple tool for evaluating a company, but no one ratio can tell the whole story. 
Investing
Can Investors Trust The P/E Ratio?
The P/E ratio is one of the most popular stock market ratios, but it has some serious flaws that investors should know about. 
Investing
Getting On The Right Side Of The P/E Ratio Trend
Buying at the right time is crucial, but how do we know when that is? 
Investing
Explaining Forward PricetoEarnings Ratio
The estimated P/E of a company is often used to compare current earnings to estimated future earnings. 
Investing
Understanding The P/E Ratio
Learn what the price/earnings ratio really means and how you should use it to value companies.

P/E 30 Ratio
The pricetoearnings (P/E) ratio is the valuation ratio of a ... 
Trailing PriceToEarnings  Trailing P/E
The sum of a company's pricetoearnings, calculated by taking ... 
P/E 10 Ratio
A valuation measure, generally applied to broad equity indices, ... 
Rule Of 18
A rule whereby the sum of the inflation rate and the P/E ratio ... 
Multiple
A term that measures some aspect of a company's financial wellbeing, ... 
Earnings Yield
The earnings per share for the most recent 12month period divided ...