S&P 500   4,567.00
DOW   34,483.72
QQQ   393.82
S&P 500   4,567.00
DOW   34,483.72
QQQ   393.82
S&P 500   4,567.00
DOW   34,483.72
QQQ   393.82
S&P 500   4,567.00
DOW   34,483.72
QQQ   393.82

Low PE Growth Stocks

This page lists companies that have unusually low price-to-earnings growth ratios (PEG ratios). The PEG ratio is a valuation metric for determining the relative trade-off between a stock's price, its earnings per share (EPS) and its expected earnings growth. It is calculated by dividing a stock's P/E ratio by the earnings growth rate. PEG ratios are particularly useful in comparing the valuation of two stocks that have significantly different earnings growth rates. How to interpret PEG (price-to-earnings growth) ratios.

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CompanyCurrent PricePE RatioPEG RatioMarket CapVolumeAverage VolumeIndicator(s)
CTRA
Coterra Energy
$20.08
-3.6%
22.560.09$16.34 billion23.58 million8.74 millionAnalyst Report
News Coverage
High Trading Volume
SID
Companhia Siderúrgica Nacional
$3.84
-4.0%
1.790.11$5.30 billion3.99 million4.26 millionUpcoming Earnings
CBD
Companhia Brasileira de Distribuição
$4.05
-2.2%
2.810.12$1.09 billion1.03 million1.60 millionUpcoming Earnings
Short Interest ↑
News Coverage
NRG
NRG Energy
$36.02
-1.7%
3.610.12$8.82 billion4.25 million2.84 million
TX
Ternium
$38.19
+1.2%
2.190.12$7.66 billion1.28 million786,961Short Interest ↑
PTR
PetroChina
$43.44
-0.5%
6.180.12$79.50 billion185,554209,555Analyst Upgrade
Short Interest ↑
DFS
Discover Financial Services
$107.85
-4.8%
6.450.12$31.61 billion3.57 million2.05 million
OLN
Olin
$54.35
-6.6%
9.290.13$8.66 billion2.11 million1.40 million
BCS
Barclays
$9.90
-0.7%
5.530.13$41.71 billion5.14 million5.20 million
LPL
LG Display
$8.39
-2.6%
4.010.14$6.00 billion753,686702,433Gap Down
PBR
Petróleo Brasileiro S.A. - Petrobras
$10.67
-1.3%
2.710.15$69.59 billion34.34 million32.90 millionDividend Increase
Short Interest ↑
EC
Ecopetrol
$12.85
+0.5%
11.680.15$26.42 billion1.78 million981,476Analyst Downgrade
TEF
Telefónica
$4.51
+2.0%
2.090.16$25.43 billion2.87 million1.74 millionDividend Cut
EQNR
Equinor ASA
$25.06
+0.3%
29.480.16$81.35 billion3.39 million2.90 millionAnalyst Report
Short Interest ↑
STLA
Stellantis
$17.13
-2.3%
114.210.16$34.68 billion3.55 million2.82 millionUpcoming Earnings
Analyst Report
DB
Deutsche Bank Aktiengesellschaft
$12.02
-1.3%
9.460.17$24.84 billion4.78 million3.58 millionAnalyst Report
News Coverage
VALE
Vale
$12.37
-0.6%
3.550.17$63.44 billion37.49 million30.83 millionAnalyst Report
News Coverage
GGB
Gerdau
$4.52
-0.9%
3.180.18$7.77 billion9.36 million12.07 millionShort Interest ↓
TOL
Toll Brothers
$63.47
-1.3%
12.230.18$7.73 billion1.41 million1.39 millionUpcoming Earnings
LNC
Lincoln National
$66.33
-2.9%
9.590.18$11.99 billion3.50 million1.43 millionShort Interest ↓
High Trading Volume
KBH
KB Home
$39.99
-3.6%
7.630.19$3.50 billion2.08 million1.51 million
BAK
Braskem
$17.69
-4.9%
2.620.20$7.05 billion161,014249,904Short Interest ↑
CPRI
Capri
$59.22
-1.7%
22.100.20$8.91 billion2.56 million2.11 millionShort Interest ↓
FL
Foot Locker
$45.64
-4.8%
5.240.20$4.74 billion3.18 million1.80 million
DOW
DOW
$54.93
-3.4%
7.120.21$40.63 billion10.39 million4.74 millionPositive News
High Trading Volume
HOG
Harley-Davidson
$36.63
-2.8%
10.680.21$5.64 billion1.53 million1.93 millionDividend Announcement
CC
Chemours
$29.70
-4.3%
12.690.22$4.84 billion2.07 million1.34 million
MESA
Mesa Air Group
$7.06
-1.4%
7.350.22$253.39 million781,696851,669Analyst Report
Short Interest ↓
PFLT
PennantPark Floating Rate Capital
$13.02
-0.2%
7.310.22$506.23 million182,002204,829
RCII
Rent-A-Center
$44.17
-5.9%
15.500.22$2.92 billion831,243641,160Short Interest ↑
COF
Capital One Financial
$140.53
-4.4%
5.250.22$59.81 billion6.02 million3.09 millionShort Interest ↑
PVH
PVH
$106.78
-2.8%
26.300.24$7.59 billion1.24 million947,275Upcoming Earnings
TECK
Teck Resources
$26.49
-0.2%
19.340.24$13.92 billion4.16 million4.99 millionShort Interest ↑
SC
Santander Consumer USA
$41.75
-0.2%
4.150.24$12.78 billion366,031954,781Short Interest ↓
CONN
Conn's
$21.88
-3.3%
5.700.25$645.39 million295,383337,239Short Interest ↑
ATUS
Altice USA
$15.84
-0.9%
7.230.26$7.20 billion18.23 million5.01 millionHigh Trading Volume
FBP
First BanCorp.
$13.29
-2.2%
11.080.27$2.73 billion2.51 million1.84 millionShort Interest ↓
AVT
Avnet
$36.27
-1.8%
11.300.28$3.60 billion572,280725,189
SNP
China Petroleum & Chemical
$43.75
-2.4%
6.630.28$52.97 billion188,843145,022News Coverage
AER
AerCap
$56.04
-2.4%
7.730.29$7.31 billion1.66 million1.18 million
BYD
Boyd Gaming
$58.61
-2.4%
15.260.29$6.58 billion1.83 million1.20 millionAnalyst Report
Short Interest ↓
News Coverage
ATCO
Atlas
$13.51
-2.5%
21.790.29$3.35 billion581,016697,349
DXC
DXC Technology
$29.99
-3.3%
20.260.30$7.56 billion3.10 million2.35 millionAnalyst Downgrade
ARCB
ArcBest
$103.08
-3.7%
16.080.30$2.64 billion456,542316,180Short Interest ↑
ADS
Alliance Data Systems
$68.16
-3.6%
4.280.30$3.39 billion950,009838,667Gap Down
PHM
PulteGroup
$50.03
-2.9%
7.730.30$12.67 billion3.11 million2.70 million
AN
AutoNation
$123.85
-2.8%
8.520.30$8.12 billion712,089935,946
ARW
Arrow Electronics
$121.65
-2.2%
9.340.31$8.47 billion664,041470,019Insider Selling
SYF
Synchrony Financial
$44.79
-4.9%
6.320.31$24.51 billion12.95 million5.67 millionAnalyst Report
High Trading Volume
DVN
Devon Energy
$42.06
-4.2%
25.190.31$28.47 billion17.78 million11.82 millionAnalyst Report
Gap Down
GEO
The GEO Group
$8.40
-1.4%
8.160.32$1.03 billion2.50 million4.62 million
CE
Celanese
$151.36
-5.3%
6.140.32$16.48 billion1.33 million756,537Short Interest ↑
LOMA
Loma Negra Compañía Industrial Argentina Sociedad Anónima
$6.08
+3.8%
10.480.33$724.77 million1.94 million280,590High Trading Volume
ABG
Asbury Automotive Group
$163.64
+0.1%
6.620.34$3.79 billion497,640215,422High Trading Volume
TKC
Turkcell Iletisim Hizmetleri A.S.
$3.60
-2.2%
5.450.35$3.17 billion1.70 million565,752Gap Down
High Trading Volume
LU
Lufax
$6.38
+0.6%
6.130.35$15.71 billion26.59 million6.11 millionHigh Trading Volume
ASX
ASE Technology
$7.31
-1.5%
10.590.35$16.02 billion4.41 million3.27 million
HIBB
Hibbett Sports
$77.95
-7.0%
7.270.35$1.15 billion527,623446,328Upcoming Earnings
Options Volume
News Coverage
PNNT
PennantPark Investment
$6.83
-2.0%
3.040.35$457.95 million263,762359,517Short Interest ↓
Positive News
APA
APA
$25.77
-4.0%
17.180.36$9.36 billion12.52 million8.56 millionAnalyst Report
Gap Down
OI
O-I Glass
$11.07
-4.6%
24.070.36$1.74 billion2.31 million1.29 million
ING
ING Groep
$13.77
+0.1%
9.840.36$53.71 billion5.11 million4.40 million
ITUB
Itaú Unibanco
$3.92
-2.2%
7.000.36$38.42 billion61.45 million38.40 million
LAD
Lithia Motors
$291.33
+2.7%
8.650.36$8.82 billion734,893368,803Positive News
CLR
Continental Resources
$44.34
-4.6%
19.620.36$16.21 billion3.75 million2.04 millionAnalyst Report
Insider Selling
News Coverage
Gap Down
LEN
Lennar
$105.05
-2.1%
7.960.36$32.51 billion2.62 million2.35 million
OC
Owens Corning
$84.84
-2.6%
9.000.37$8.53 billion1.55 million884,629
PKI
PerkinElmer
$182.16
-1.7%
18.130.37$22.99 billion1.34 million834,924Short Interest ↑
CYH
Community Health Systems
$12.03
-4.4%
4.080.37$1.59 billion923,3372.00 millionShort Interest ↓
GHG
GreenTree Hospitality Group
$7.78
+5.9%
16.550.37$801.73 million390,182128,529Upcoming Earnings
High Trading Volume
WRK
WestRock
$43.39
-5.9%
13.910.37$11.50 billion4.46 million1.86 millionAnalyst Report
High Trading Volume
TTE
TotalEnergies
$45.99
-1.1%
11.360.38$122.02 billion3.36 million2.16 millionAnalyst Report
News Coverage
ON
ON Semiconductor
$61.43
-2.5%
40.150.39$26.47 billion5.59 million6.20 million
FNKO
Funko
$16.34
-1.6%
15.860.40$828.80 million598,7391.17 million
HBAN
Huntington Bancshares
$14.84
-3.4%
10.830.40$21.47 billion18.23 million13.65 million
TPX
Tempur Sealy International
$42.84
+0.8%
15.030.40$8.25 billion2.96 million1.89 million
VSH
Vishay Intertechnology
$20.37
-2.1%
9.890.40$2.95 billion918,040964,240
VEON
VEON
$1.73
-2.3%
7.860.41$3.03 billion7.21 million7.03 millionShort Interest ↓
CMA
Comerica
$82.53
-3.3%
10.140.41$10.82 billion1.73 million1.36 millionInsider Selling
Gap Down
IX
ORIX
$98.67
-2.4%
10.590.42$24.13 billion40,57523,588
PRDO
Perdoceo Education
$9.85
-0.4%
6.270.42$690.54 million894,484459,344News Coverage
MU
Micron Technology
$84.00
-2.5%
16.310.42$93.96 billion27.28 million19.53 millionAnalyst Upgrade
BWA
BorgWarner
$43.28
-3.0%
13.440.42$10.38 billion2.84 million2.06 million
FCX
Freeport-McMoRan
$37.08
-2.4%
14.100.43$54.45 billion26.85 million22.20 million
MRNA
Moderna
$352.43
-4.4%
21.610.43$142.89 billion25.12 million13.48 millionInsider Selling
Gap Down
FUTU
Futu
$47.49
-5.9%
19.230.43$6.90 billion4.09 million7.55 millionEarnings Report
Short Interest ↑
CRI
Carter's
$101.03
-3.4%
13.000.43$4.27 billion600,335623,091Insider Selling
CFG
Citizens Financial Group
$47.27
-3.1%
9.490.43$20.15 billion8.89 million4.63 million
TM
Toyota Motor
$177.85
+0.2%
8.550.44$248.63 billion330,608285,197Dividend Announcement
Analyst Upgrade
FANG
Diamondback Energy
$106.73
-2.9%
55.590.44$19.34 billion15.96 million2.74 millionAnalyst Report
Gap Down
High Trading Volume
F
Ford Motor
$19.19
-2.4%
27.410.44$76.69 billion103.08 million78.37 million
ANF
Abercrombie & Fitch
$36.00
-5.1%
8.240.45$2.13 billion2.50 million1.67 millionEarnings Report
Insider Selling
Buyback Announcement
Analyst Revision
LFC
China Life Insurance
$8.16
-1.4%
5.790.46$46.13 billion813,097706,700News Coverage
SMFG
Sumitomo Mitsui Financial Group
$6.47
-2.0%
7.520.46$44.46 billion2.94 million1.36 millionHigh Trading Volume
AMX
América Móvil
$17.42
+1.8%
12.010.47$57.01 billion3.73 million2.45 millionNews Coverage
ADNT
Adient
$42.45
-6.4%
3.670.47$4.01 billion1.82 million878,246Short Interest ↓
High Trading Volume
CVGI
Commercial Vehicle Group
$8.39
-5.6%
16.130.48$276.69 million334,986278,923Short Interest ↓
Positive News
GPI
Group 1 Automotive
$194.75
-0.8%
6.360.48$3.53 billion213,160176,490
C
Citigroup
$63.70
-2.1%
5.950.48$129.11 billion35.56 million19.67 million
EOG
EOG Resources
$87.00
-1.6%
16.830.49$50.90 billion7.41 million4.50 millionAnalyst Report
Insider Buying

Summary - Fundamental analysis is an important part of any investment strategy. Investors have many tools that can help them determine if a company is appropriately valued such as a balance sheet. When investing in stocks, one of the key ratios that is used is the price-to-earnings (P/E) ratio. In simple terms, this tells an investor how much they are paying to purchase $1 or a company’s earnings.

However, while the P/E ratio can show a company as a good investment, it doesn’t take into account future earnings. This is why many investors have come to supplement the P/E ratio with another measurement tool the price-to-earnings growth (or PEG) ratio. This ratio takes into account a company’s future earnings growth to give a more accurate picture of a stock’s valuation.

PEG is particularly important for certain growth stocks that may historically have periods of higher and lower growth when compared to the overall stock market. These stocks may have a forecasted EPS growth rate that supports a P/E ratio that would make a stock seem overvalued. Likewise, a PEG ratio for a mature company may show that what many investors consider to be a fair P/E ratio is actually indicative of a stock that is overvalued.

However, like other ratios, the PEG ratio is most helpful when comparing a stock price to others in its industry or sector. Some sectors, such as technology, may have much higher future earnings growth. However, the accepted rule among investors is that a PEG of greater than 1 is considered to indicate a stock price that is too high based on expected earnings growth. A PEG of less than 1 is considered to indicate a stock that is undervalued based on projected earnings growth.

Introduction

Legendary investment manager Peter Lynch once wrote: "The P/E ratio of any company that's fairly priced will equal its growth rate". Certainly, a stock's price-to-earnings ratio (P/E ratio) is widely considered a reasonably accurate measure of a company's valuation, and can sometimes be used as a way of comparing one company against another.

The P/E ratio is a measurement of how much an investor is paying to buy $1 of a company’s earnings or profit. To calculate the P/E Ratio you simply divide the stock price by the earning per share:

P/E Ratio = Stock Price/Earnings per share (EPS)

For example, if a company is reporting earnings of $3 per share and their stock is selling for $30 per share, the P/E ratio is 10 ($30 per share/$3 per share).

While there is no “standard” P/E Ratio for all stocks and sectors, investors can generally find that different industries will have a P/E ratio that is considered normal. For example, it’s not uncommon to find technology companies with a P/E ratio of 20 or higher. This is due in part because these companies include many growth stocks that are anticipated to increase in share price and EPS. Financial services companies might have P/E ratios in the low teens. For investors this means rather than one-size-fits-all, the objective is to ensure that two companies in the same industry have a similar P/E ratio. However, if all companies in a particular sector begin to have P/E ratios that are abnormally high or low (based on their historical pattern) it may indicate that the stock is overvalued or undervalued. For example, in the months leading up to the real estate crash of 2007, the P/E ratio of real estate stocks soared. A similar phenomenon occurred before the tech stock crash in the early 2000s.

However, like many ratios, the P/E ratio has limitations. The primary limitation of P/E ratio is that it is limited to a moment in time. It gives you an accurate assessment of where one company compares to another at that moment. However, to get a more accurate view of whether a stock is overvalued or undervalued requires knowledge of the anticipated growth rate between the two companies. For example, a company with a P/E of 30 with an anticipated growth rate of 50% may be much more undervalued than a company with a more enticing P/E of 20, but with an anticipated growth rate of 5%, which is fairly typical of a mature company.

Because of the limitations of the P/E ratio, investors will frequently use a ratio that factors in a company’s projected or historical growth rate to get a more accurate picture of a stock’s valuation. This number is known as the PEG ratio and it is the focus of this article. In this article we’ll define the PEG ratio and provide examples, we’ll also review how to interpret the PEG ratio and review some of the limitations of this ratio.

What is the price-to-earnings growth (PEG) ratio?

This limitation spawned the need for a new metric, the ration of the P/E to growth (or PEG). The formula for PEG is as follows:

P/E Ratio/Earnings per share (EPS) growth Rate

If you were to put this formula into a sentence, it would say that the PEG ratio is a calculation that helps investors determine whether a stock's price is overvalued or undervalued by not only looking at their current earnings but also looking at their expected future earnings growth.

To test Lynch’s theory, PEG would imply that if a company had a “Fair P/E ratio” than it should have a PEG of around 1.

If:         Fair P/E Ratio = EPS Growth Rate

Than:    P/E Ratio/EPS Growth Rate = 1

How to interpret the PEG ratio

If the PEG ratio is greater than 1, the implication is that the stock is more expensive (in relative terms). A PEG ratio below 1 means that a stock is trading at below its fair value.

While it’s true that the P/E ratio is a multiple and the PEG is a percent, it’s important to focus on the true objective and that is to determine whether a stock is properly valued. To that end, the PEG is considered to be more accurate than simply looking at a company’s P/E ratio when determining proper valuation.

For example, by definition, a high P/E ratio typically signals to investors that a stock is overvalued. However, if the company has high growth estimates than calculating the PEG can show a very different picture and one that could suggest the stock is still a buy. In our earlier example, a company with a P/E ratio of 30 might be considered to be overbought, but if it is forecasting a growth rate of 50% than its PEG ratio suggests. Using the formula:

PEG = P/E Ratio/Growth Rate, the company would have a PEG ratio of 0.6

PEG = 30/50 = 0.6

In this case, the PEG number suggests that either analysts are setting their expectations too low or that the stock’s growth is being undervalued. In either case, the ratio suggests the stock has room to grow.

The opposite is also true. If a company has a P/E range of 8 which may be lower than expected or lower than others in its sector, the assumption could be that the stock is undervalued. However, a closer look may indicate that the company is expecting only about 5% for the growth for the year. While that growth rate is certainly not poor when you perform the PEG calculation you come up with:

PEG = 8/5 = 1.6

In this case, the company may very well have a difficult time increasing their share price above its current level.

Limitations of the P/E Growth ratio

One of the basic limitations of PEG is that it does not forecast growth beyond the period being measured. If a company has a stellar PEG number, it says nothing about the company’s future growth prospects. It also does not provide a context for the growth number. For example, that growth could be due to a one-time event. Also, when compared with other analysis tools such as a discounted cash flow analysis, the PEG ration tends to undervalue the companies with the highest growth rates. Another limitation of the PEG ratio is how future growth is calculated. If the company uses projected growth, it may significantly different (and easier to manipulate) than if they were to use historical data.

However, these limitations make the PEG ratio no different than other ratios or metrics. Every investor needs to use more than one measurement tool to get a complete picture of a stock’s valuation. For example, looking at a company’s balance sheet over the course of several quarters can give investors a better look at trends having to do with their revenue growth or free cash flow.

The final word on the P/E growth ratio

The P/E growth ratio (or PEG) was developed and is used as a refinement of the standard P/E ratio that is used in fundamental analysis. The PEG ratio factors in a company’s forecasted growth potential either using historical data (meaning it's backward-looking) or using projected growth numbers (forward-looking). The formula for the PEG ratio is as follows:

PEG Ratio = P/E Ratio/Growth rate

Just like a P/E ratio, there is no "standard" for what constitutes a good PEG ratio. Some industries will have a "typical" PEG ratio that would seem high or low for another sector. In general, however, a P/E ratio that is around 1 is said to indicate a fair valuation for a stock. So for example, a stock that has a P/E ratio of 20 with a forecasted growth rate 20 percent would have a PEG ratio of 1.

A PEG ratio above 1 will typically indicate an overvalued stock and a PEG ratio of less than 1 will typically be an indication that a stock is undervalued.

Like any fundamental analysis ratio, the PEG has limitations, the largest being that it is only predictive of the time period being measured. For example, a company may be projecting 20% growth for the following year, but even if it achieves that growth there is no indication that it will continue to grow at that pace, nor does the PEG ratio provide a context for the growth figure. Also, the growth projections used for the PEG ratio can be determined using past growth data. While accurate in the sense that it is based on an actual, not projected, a number it can be higher or lower than the rate of growth the company is currently experiencing. Despite these limitations, the PEG ratio is still considered to be a good baseline test of valuation.


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