Price-Earnings Relative

DEFINITION of 'Price-Earnings Relative'

A price-earnings ratio of a stock divided by the price-earnings ratio of a market measure, or index, such as the S&P 500 or Wilshire 5000.

BREAKING DOWN 'Price-Earnings Relative'

This is a method for judging whether a price-earnings ratio is reasonable in relation to market conditions and historical P/Es.

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RELATED FAQS
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    Understand the price/earnings to growth ratio and why it may be a better stock valuation tool than the more widely used price-earnings ... Read Answer >>
  2. 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 >>
  3. When computing the PEG ratio for a stock, how is a company's earnings growth rate ...

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  4. What are the main income statement ratios?

    Learn how to calculate and interpret some of the most common and insightful financial ratios, like earnings per share, from ... Read Answer >>
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