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
  1. Why is the PEG (price to earnings growth) ratio something I should be looking at ...

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  2. What is considered a good PEG (price to earnings growth) ratio?

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  3. When computing the PEG ratio for a stock, how is a company's earnings growth rate ...

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