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.
INVESTOPEDIA EXPLAINS '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.

Earnings Per Share  EPS
The portion of a company's profit allocated to each outstanding ... 
Payback Period
The length of time required to recover the cost of an investment. ... 
Price/Earnings To Growth  PEG ...
A stock's pricetoearnings ratio divided by the growth rate ... 
PriceEarnings Ratio  P/E Ratio
A valuation ratio of a company's current share price compared ... 
Price/Earnings to Growth and Dividend ...
A variation of the pricetoearnings ratio where a stock's value ... 
Risk
The chance that an investment's actual return will be different ...

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The investment outlook for a smallcap stock is determined by operational outlook and current stock price. The operational ... Read Full Answer >> 
Why is the PEG (price to earnings growth) ratio something I should be looking at ...
The price/earnings to growth, or PEG, ratio is something that should be looked at when evaluating a given stock, because ... Read Full Answer >> 
How do I use the PEG (price to earnings growth) ratio to determine whether a stock ...
The PEG ratio, or price/earnings to growth ratio, is a good tool for determining stock valuation when you need to make a ... Read Full Answer >> 
What is considered a good PEG (price to earnings growth) ratio?
The price/earnings to growth, or PEG, ratio is a very useful stock valuation measure investors and analysts can use to get ... Read Full Answer >> 
Over what duration should I be examining a given stock's PEG (price to earnings growth) ...
When comparing investment candidates or simply determining whether the current market price of a stock is overvalued or undervalued, ... Read Full 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 Full Answer >>

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