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The three names are chemically synonymous, but historically peg is preferred in the biomedical field, whereas peo is more prevalent in the field of polymer chemistry. The meaning of peg is a small usually cylindrical pointed or tapered piece (as of wood) used to pin down or fasten things or to fit into or close holes Peg = p/e ratio ÷ earnings growth rate for example, a company trading at 20 times earnings with an expected annual growth rate of 10% would have a peg ratio of (20 ÷ 10) = 2 In this case, investors are paying two times.
Peg ratio stands for price/earnings to growth ratio, which lets analysts assess how likely a firm is to grow in the coming times The ratio obtained can either be positive, negative, or null, depending on which the calculations are interpreted. When evaluating any potential investment opportunity, one important number to know about is the peg ratio Otherwise known as the “price per earnings to growth ratio,” it measures how fast a company is able to grow its earnings.
Learn what it is and how to calculate it here.
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