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.

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What are some of the limitations and drawbacks of using a payback period for analysis?
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 >> 
How do I create grouping schedule codes and subcodes for trial balances?
Find out more about the payback period, what it measures and how to calculate the payback period of a company's project using ... Read Answer >> 
What is considered a good PEG (price to earnings growth) ratio?
Learn about the price/earnings to growth (PEG) ratio and understand what investors and market analysts consider a good ratio ... Read Answer >> 
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 ...
Understand the price/earnings to growth ratio and why it may be a better stock valuation tool than the more widely used priceearnings ... Read Answer >>