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.

RELATED TERMS
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  2. Dow Jones Wilshire Large-Cap Index

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    Former name of the Wilshire US Small-Cap Index, a market-capitalization ...
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  5. Dow Jones Wilshire Mid-Cap Index

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  6. Price/Earnings To Growth - PEG ...

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RELATED FAQS
  1. 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 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 ...

    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 >>
  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 >>
  5. What is the average price-to-book ratio in the railroads sector?

    Explore the average price-to-book ratio of companies in the railroad industry, and learn why the P/B ratio is better than ... Read Answer >>
  6. Why has the price to sales ratio become a more popular metric than it was in the ...

    Explore the usage of the price to sales ratio (P/S), and learn why it has become a more popular equity valuation metric for ... Read Answer >>
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