DEFINITION of 'PEG Payback Period'
A key ratio that is used to determine the time it would take for an investor to double their money in a stock investment. The pricetoearnings growth payback period is the time it would take for a company's earnings to equal the stock price paid by the investor. A company's PEG ratio is used rather than their pricetoearnings ratio because it is assumed that a company's earnings will grow over time.
BREAKING DOWN 'PEG Payback Period'
The best reason for calculating the PEG payback period is to determine the riskiness of an investment. Generally the longer the payback period the more risky an investment becomes. This is because the payback period relies on the assesment of a company's earnings potential. It is harder to predict such potential further into the future, and subsequently there is a greater risk that those returns will not occur.

Payback Period
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Examine the payback period method of analyzing proposed capital investment projects, and learn about its advantages and disadvantages. Read Answer >> 
How do you find the breakeven point using a payback period?
Understand what a company's breakeven point is and what its payback period is. Learn why a company would want to track both ... Read Answer >> 
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What is considered a good PEG (price to earnings growth) ratio?
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When computing the PEG ratio for a stock, how is a company's earnings growth rate ...
Remember that the price/earnings to growth ratio (PEG ratio) is simply a given stock's price/earnings ratio (P/E ratio) divided ... Read Answer >> 
Why is the PEG (price to earnings growth) ratio something I should be looking at ...
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