Low PE Ratio Stocks

This page lists companies that have unusually low price-to-earnings ratios (PE Ratios), which is a common financial ratio used for valuing a stock. A stock's PE ratio is calculated by taking its share price and divided by its annual earnings per share. A higher PE ratio means that investors are paying more for each unit of net income, making it more expensive to purchase than a stock with a lower P/E ratio. Value investors often search for stocks with relatively low P/E ratios as a means for identifying cheaper stocks that the market has largely passed over. Understanding the price to earnings ratio.

Country:
Market Cap:
CompanyPE RatioMarket CapCurrent PricePrice ChangeVolumeAverage VolumeIndicator(s)
Companhia Paranaense de Energia - COPEL logo
ELP
Companhia Paranaense de Energia - COPEL
0.44$2.98 billion$1.10+0.5%38,54610.43 millionIncrease in Short Interest
Companhia Paranaense de Energia - COPEL logo
ELPVY
Companhia Paranaense de Energia - COPEL
0.49$3.34 billion$1.22+4.3%5004,392Increase in Short Interest
Gap Down
ISUZY
Isuzu Motors
1.44$7.78 billion$10.55+0.9%9,81719,605
Banco Macro logo
BMA
Banco Macro
1.60$848.51 million$12.66-0.1%619296,374Decrease in Short Interest
Dime Community Bancshares logo
DCOM
Dime Community Bancshares
1.61$1.09 billion$32.20-2.2%104262,053
Unisys logo
UIS
Unisys
1.68$1.67 billion$24.51-1.8%497559,048
PPDF
PPDAI Group
1.94$1.90 billion$6.39-7.7%991,3891.35 million
Petrofac logo
POFCY
Petrofac
2.07$587.88 million$0.85+16.4%8,18812,817Increase in Short Interest
Gap Down
Banco BBVA Argentina logo
BBAR
Banco BBVA Argentina
2.08$539.19 million$2.58-2.3%15372,701Gap Up
Grupo Financiero Galicia logo
GGAL
Grupo Financiero Galicia
2.33$1.04 billion$7.28-0.5%2,715645,900News Coverage
NRG Energy logo
NRG
NRG Energy
2.46$9.44 billion$38.55-0.1%20,5063.67 million
Frontline logo
FRO
Frontline
2.48$1.34 billion$6.66-1.6%81,1842.23 million
Dynex Capital logo
DX
Dynex Capital
2.57$591.62 million$19.43-0.3%2,286508,401Decrease in Short Interest
Cannae logo
CNNE
Cannae
2.59$3.78 billion$40.94-0.7%3811.05 million
Euronav logo
EURN
Euronav
2.52$1.86 billion$8.15-3.6%17,9431.53 millionAnalyst Downgrade
News Coverage
Gap Up
China Communications Construction logo
CCCGY
China Communications Construction
2.63$6.47 billion$8.00flat02,200
China Railway Construction logo
CWYCY
China Railway Construction
2.75$6.99 billion$5.15flat07,150
DHT logo
DHT
DHT
2.77$970.13 million$5.62-1.1%47,5423.00 millionAnalyst Downgrade
Verso logo
VRS
Verso
2.90$519.89 million$15.71-0.1%312227,183
Tronox logo
TROX
Tronox
3.01$2.99 billion$19.19-3.2%2,3051.70 million
Swire Pacific logo
SWRAY
Swire Pacific
3.14$30.59 billion$7.87-1.3%8,45327,160Decrease in Short Interest
American Equity Investment Life logo
AEL
American Equity Investment Life
3.32$2.98 billion$31.14-0.3%2,495783,206Analyst Revision
PennyMac Financial Services logo
PFSI
PennyMac Financial Services
3.45$4.05 billion$58.69+0.3%4,248970,438Analyst Revision
Micro Focus International logo
MFGP
Micro Focus International
3.78$2.47 billion$7.41+0.5%14,8981.11 millionDecrease in Short Interest
KNVKF
Kinnevik
3.82$14.57 billion$52.95-0.7%1501,773Upcoming Earnings
Decrease in Short Interest
News Coverage
Capita logo
CTAGY
Capita
3.84$1.07 billion$2.57flat0263
MagnaChip Semiconductor logo
MX
MagnaChip Semiconductor
3.91$1.17 billion$25.01-1.1%5031.17 million
Woori Financial Group logo
WF
Woori Financial Group
3.99$6.69 billion$27.79+3.0%9,14422,046Gap Down
CANG
Cango
4.39$1.16 billion$8.12+5.3%1,745960,463Increase in Short Interest
Gap Down
Mitie Group logo
MITFY
Mitie Group
4.64$1.32 billion$3.71+10.7%47429,849Gap Down
TORM logo
TRMD
TORM
4.24$654.32 million$8.81-2.9%53,51860,261Gap Up
Genel Energy logo
GEGYY
Genel Energy
4.24$580.38 million$2.08flat03News Coverage
NortonLifeLock logo
NLOK
NortonLifeLock
4.28$12.92 billion$21.67-2.4%46,2045.49 millionAnalyst Report
Big Lots logo
BIG
Big Lots
4.26$2.38 billion$66.89-1.4%1,3611.23 million
Ardagh Group logo
ARD
Ardagh Group
4.37$501.02 million$27.10+0.9%2123,829Increase in Short Interest
News Coverage
Transportadora de Gas del Sur logo
TGS
Transportadora de Gas del Sur
4.36$682.00 million$4.53-1.7%72,615106,996
Renewable Energy Group logo
REGI
Renewable Energy Group
4.19$2.70 billion$58.00-4.7%15,3111.30 million
BANCO DO BRASIL/S logo
BDORY
BANCO DO BRASIL/S
4.46$14.56 billion$5.08-1.0%118,709499,000Decrease in Short Interest
Fly Leasing logo
FLY
Fly Leasing
4.51$514.52 million$16.83-0.3%5,156596,811Increase in Short Interest
Lloyds Banking Group logo
LYG
Lloyds Banking Group
4.47$42.63 billion$2.37-1.7%73,1006.06 millionAnalyst Upgrade
Increase in Short Interest
InterRent Real Estate Investment Trust logo
IIPZF
InterRent Real Estate Investment Trust
4.58$1.51 billion$10.91+0.0%0642
Country Garden logo
CTRYY
Country Garden
4.72$26.44 billion$30.00flat0433Increase in Short Interest
Washington Real Estate Investment Trust logo
WRE
Washington Real Estate Investment Trust
4.72$1.91 billion$22.45-0.7%1,638442,855News Coverage
Bank of Communications logo
BCMXY
Bank of Communications
4.77$44.59 billion$15.01flat0233
Genmab A/S logo
GNMSF
Genmab A/S
4.81$20.91 billion$338.92-1.2%1071,552News Coverage
Brilliance China Automotive logo
BCAUY
Brilliance China Automotive
4.88$4.68 billion$9.27+2.7%94911,033Decrease in Short Interest
Gap Up
Agile Group logo
AGPYY
Agile Group
4.88$5.35 billion$68.35flat2367
Apartment Investment and Management logo
AIV
Apartment Investment and Management
4.85$934.04 million$6.18-1.3%22,0544.86 millionDecrease in Short Interest
Bank of China logo
BACHY
Bank of China
4.92$113.63 billion$9.65+0.6%28,78355,298Increase in Short Interest
The GEO Group logo
GEO
The GEO Group
4.85$707.22 million$5.68-2.6%20,1405.30 million
Aegon logo
AEG
Aegon
5.01$12.63 billion$4.61-2.1%42,7002.35 millionIncrease in Short Interest
BIO.B
Bio-Rad Laboratories
5.14$17.92 billion$600.87+3.7%21894High Trading Volume
Gap Down
Enstar Group logo
ESGR
Enstar Group
5.16$5.68 billion$257.05+1.9%33,22744,511
Bio-Rad Laboratories logo
BIO
Bio-Rad Laboratories
5.29$18.03 billion$618.29+2.4%155215,428
LFSYY
Lifestyle International
5.20$1.26 billion$20.90flat1525
Agricultural Bank of China logo
ACGBY
Agricultural Bank of China
5.24$137.89 billion$9.85+0.3%1,3877,694Decrease in Short Interest
Worthington Industries logo
WOR
Worthington Industries
5.12$3.50 billion$65.06-2.9%1,181283,824
MSG Networks logo
MSGN
MSG Networks
5.21$902.84 million$15.67-1.6%541722,801Analyst Downgrade
Provident Financial logo
FPLPY
Provident Financial
5.35$814.11 million$3.21flat0271Increase in Short Interest
Xerox logo
XRX
Xerox
5.25$4.86 billion$24.40-2.1%4,2002.89 million
FutureFuel logo
FF
FutureFuel
5.30$610.22 million$13.77-1.3%306183,812
Centrais Elétricas Brasileiras S.A. - Eletrobrás logo
EBR
Centrais Elétricas Brasileiras S.A. - Eletrobrás
5.45$8.33 billion$6.10-1.0%21,9521.57 millionIncrease in Short Interest
Scorpio Tankers logo
STNG
Scorpio Tankers
5.34$978.87 million$16.35-3.0%7,0391.65 million
BB Seguridade Participações logo
BBSEY
BB Seguridade Participações
5.56$8.34 billion$4.17-0.5%144,895160,994Decrease in Short Interest
Encore Capital Group logo
ECPG
Encore Capital Group
5.58$1.22 billion$38.39-1.6%852472,601
Shinhan Financial Group logo
SHG
Shinhan Financial Group
5.76$17.21 billion$32.98-1.0%580128,914Decrease in Short Interest
CURO Group logo
CURO
CURO Group
5.69$573.99 million$13.61-1.5%556430,414
Flagstar Bancorp logo
FBC
Flagstar Bancorp
5.69$2.37 billion$43.90-2.3%942617,576
China Construction Bank logo
CICHY
China Construction Bank
5.92$207.88 billion$16.63-0.6%30,222113,314Increase in Short Interest
Koppers logo
KOP
Koppers
5.83$731.16 million$33.89-1.6%101152,759Decrease in Short Interest
Gap Up
Maxar Technologies logo
MAXR
Maxar Technologies
5.80$2.26 billion$35.85-2.3%7,9241.70 million
Innoviva logo
INVA
Innoviva
5.99$1.18 billion$11.75+0.7%863555,640
Loma Negra Compañía Industrial Argentina Sociedad Anónima logo
LOMA
Loma Negra Compañía Industrial Argentina Sociedad Anónima
5.91$729.54 million$6.03-1.5%586326,193
Piedmont Office Realty Trust logo
PDM
Piedmont Office Realty Trust
6.02$2.21 billion$17.77-0.4%5,584774,822Decrease in Short Interest
PBF Logistics logo
PBFX
PBF Logistics
6.13$898.07 million$14.40-0.4%105,365314,677News Coverage
Unum Group logo
UNM
Unum Group
6.04$5.82 billion$28.14-1.5%38,8702.56 millionAnalyst Report
CNOOC logo
CEO
CNOOC
6.19$54.36 billion$121.76flat0223,159
New Oriental Education & Technology Group logo
EDU
New Oriental Education & Technology Group
6.34$25.34 billion$15.03+1.7%55,52213.46 millionUpcoming Earnings
Increase in Short Interest
News Coverage
Industrial and Commercial Bank of China logo
IDCBY
Industrial and Commercial Bank of China
6.26$252.25 billion$14.16-0.2%36,27974,056Increase in Short Interest
Obayashi logo
OBYCF
Obayashi
6.45$6.71 billion$9.35flat1960Increase in Short Interest
Huntsman logo
HUN
Huntsman
6.29$6.38 billion$27.93-3.0%14,5042.00 millionAnalyst Revision
GrafTech International logo
EAF
GrafTech International
6.53$3.08 billion$11.49-0.3%21,2343.03 million
Imperial Brands logo
IMBBY
Imperial Brands
6.64$20.35 billion$21.50+0.4%143,707247,746News Coverage
KB Financial Group logo
KB
KB Financial Group
6.67$19.68 billion$47.27-0.1%1,856214,379Increase in Short Interest
Coherus BioSciences logo
CHRS
Coherus BioSciences
6.75$997.28 million$13.78+0.6%2,5781.35 millionUnusual Options Activity
News Coverage
Perdoceo Education logo
PRDO
Perdoceo Education
6.64$823.93 million$11.62-1.2%5,133463,448News Coverage
Credit Suisse Group logo
CS
Credit Suisse Group
6.67$26.22 billion$10.60-1.0%111,0004.56 millionAnalyst Report
Increase in Short Interest
SUGBY
Suruga Bank
6.79$934.36 million$40.25flat0N/AHigh Trading Volume
CrossAmerica Partners logo
CAPL
CrossAmerica Partners
6.99$746.38 million$19.71+1.4%59,14172,726
Petróleo Brasileiro S.A. - Petrobras logo
PBR
Petróleo Brasileiro S.A. - Petrobras
7.00$53.94 billion$8.26-0.1%298,54038.55 millionDecrease in Short Interest
News Coverage
Bristow Group logo
VTOL
Bristow Group
7.02$786.42 million$26.31-0.6%318102,863
Qiwi logo
QIWI
Qiwi
7.11$677.93 million$10.88+0.6%1,443464,618Analyst Upgrade
Ingles Markets logo
IMKTA
Ingles Markets
7.11$1.27 billion$62.73+0.4%402122,914
Turkcell Iletisim Hizmetleri A.S. logo
TKC
Turkcell Iletisim Hizmetleri A.S.
7.14$4.01 billion$4.57+0.2%7,340680,115Decrease in Short Interest
Stellantis logo
PUGOY
Stellantis
7.16$24.52 billion$27.28+0.7%43,60021,174High Trading Volume
FINV
FinVolution Group
7.25$1.90 billion$6.45+0.9%5,7453.77 millionIncrease in Short Interest
Anhui Conch Cement logo
AHCHY
Anhui Conch Cement
7.22$8.22 billion$31.63-2.0%21,67422,935
Avient logo
AVNT
Avient
7.21$4.49 billion$47.97-2.5%468571,430Upcoming Earnings
Opera logo
OPRA
Opera
7.16$1.27 billion$10.45-1.6%3,190323,137
Aviva logo
AVVIY
Aviva
7.31$21.96 billion$11.18+0.4%57,65862,733Analyst Report
Increase in Short Interest
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Smart investors always try to get the best possible deal on whatever security or asset they are buying. The better the deal, the higher the chance of generating a substantial amount of profit from the investment. To do so, value and non-value investors use a wide array of tools to try and analyze the actual value of an asset.

The price to earnings ratio (P/E) is one of the most widely used financial measurements when it comes to stock selection.

What is the Price Earnings Ratio?

Price-earnings ratio is a measure that seeks to ascertain the relationship between the price of a company’s stock and its earnings per share. Being a ratio, it is calculated by dividing a company’s current stock price by its earnings per share over a given time period (usually one year).

The ratio provides a way for investors to determine how much they would pay for every dollar of earnings. Value investors use the P/E ratio to determine whether a stock is overvalued or undervalued. The ratio can also reveal how a stock’s value compares with that of the industry average or a benchmark index for that matter.

Stock price expresses the value that investors are placing on an investment while the price to earnings ratio indicates the amount of money investors are willing to pay for every dollar of earnings. Given that P/E is calculated using earnings per share, the measurement is subject to manipulation by management and the specific accounting techniques they choose.

Looking at P/E allows you to consider what premium you are paying for a company’s earnings.  It is up to you to decide whether the company’s expected growth warrants the premium at stake.

How to Calculate P/E

The two components used to calculate the price to earnings ratio are the stock price, which is set by forces of demand and supply in the market, and EPS, or earnings per share

Earnings per share are calculated by starting with the net income of the company, subtracting any dividends on preferred stock that the company must pay, and dividing the result by the number of outstanding shares. This metric gives insight into a company’s financial health. Earnings per share provide the E portion of the P/E ratio.

The price to earnings ratio is calculated using earnings per share of the last four quarters, a metric normally referred to as trailing earnings per share.  P/E is usually only calculated for companies that are profitable, i.e., companies with positive earnings. A company that is losing money would have a negative P/E, but because a low P/E is a good sign and an even slightly negative P/E could mean that the company is losing a lot of money, negative P/E values are usually listed as N/A (not available) to avoid confusion.

For example, Company XYZ is trading at $50 a share and has trailing earnings per share of $10.  The price to earnings ratio, in this case, will be 5

What this means is that investors will have to pay $5 for every dollar of the company’s earnings. In other words, the stock is trading at a multiple of 5. Since a trailing EPS was used, the ratio is considered a trailing price-earnings ratio. Whenever a future predicted EPS is used, then the ratio is considered a leading price/earnings ratio.

P/E Analysis

A stock with a lower P/E ratio relative to the industry average will often be a better value when compared to a stock with a higher P/E. A low P/E ratio is usually good as it allows investors to pay less for every dollar on earnings.

However, it is also important to note that a lower P/E ratio may at times be indicative of poor current and predicted performance. While an investor will be able to pay less for every dollar of earnings, should underperformance continue then investors may lose big.

Companies with higher P/E are expected to have higher earnings in the future, and they are usually expected to issue higher dividends.  That is why investors are willing to pay a hefty amount for the earnings on offer, and why the price is so high. Companies with increasing earnings per share will most of the time see the market value of their share increase. It is up to the individual investor to do their analysis and decide if the high price and high P/E ratio are justified based on the company’s outlook, or if the stock is overvalued and not a good buy.

Price to earnings ratio is especially useful when comparing companies within the same industry. For example, the market price of company XYZ is $60 and has earnings per share of $10, its P/E, in this case, will be $6. If the industry P/E average is 8, it means the market value of company XYZ ought to be $80 (8X10) thus the stock as it stands is undervalued by $20. The investor’s job then would be to find out if there is some reason why XYZ will underperform its peers or if the stock has simply gone unnoticed and it’s a good time to snatch it up while the price is low.

Conversely, if the average P/E ratio of the industry is 4, then it means the stock is overvalued by $20 given that it ought to be trading at $40 ($10x4). Depending on the outlook for the company, this might be a good time to sell the stock.

Why the Price-Earnings Ratio Is Important

Given that P/E is the current price of a stock divided by previous earnings per share, it is always subject to daily change as stock price changes. As the price varies, P/E varies along with it in order to show the current price relative to past performance.

Price to earnings ratio is important because it gives clues about key fundamentals of a company such as its future growth prospects, investor confidence, and the amount of risk investors take on at its current price. If a company has a proven track record, then it is more than certain to have a higher P/E, relative to a company with a low P/E.

Companies with robust corporate governance command higher P/E than their peers as good oversight goes a long way in strengthening investor confidence in the stock. High and stable dividend-paying companies also command high P/E in part because it shows fundamental strength in a company’s ability to reward shareholders.

Value investors, who are always looking for bargains in the stock market, will search for stocks that have a low P/E ratio. The lower the metric, the less they have to pay per dollar of earnings. Companies that have a low P/E ratio but are otherwise solid companies can be a good investment because they are currently undervalued but the price is likely to increase in the future.

It is important to look at a company’s P/E in light of industry benchmarks. Industries affected by economic cycles tend to trade at much lower P/E compared to those that aren’t.

How to Use Price to Earnings to Evaluate a Company

The first step to using price to earnings to evaluate whether a stock is fairly valued involves finding companies that operate in the same field. Although finding a perfect match will always be a challenge, narrowing down the search to such things as geography or product and services is a good starting point.

The next step after finding comparable companies is adjusting earnings across the peer group. In this case, one ought to find out whether the comparable companies do use the same accounting methods such as inventory, revenue, and depreciation when it comes to calculating earnings. Adjustments should be made to achieve comparable earnings.

Once you have achieved comparable EPS, the next step is calculating the price to earnings ratio of the companies to be able to come up with the industry average. Once the industry average is ascertained, one can go forth and compare each company’s P/E to the industry average.

If a company’s P/E is slightly higher than the industry average, then it means that the market expects the company to continue outperforming the industry going forward. A company with a higher P/E will only be justified if it outperforms the market in key parameters such as future sales and EPS growth. A stock can be considered overpriced if the peer group comparison does not justify the high P/E.

If a company has a lower P/E than the industry, it may not necessarily mean that the company is unfairly undervalued. Instead, the same could mean that the market believes the company is struggling, hinting at possible underperformance in future.

Different industries come with different P/E benchmarks that one ought to consider when it comes to making a comparison. That said it is important to know when a sector or industry is overpriced before making an investment decision.

It’s been found that whenever the P/E ratio of all companies in a sector is above the historical average, then a major price correction may come into play sooner rather than later.  Higher P/E across an industry can make it impossible for companies to live up to expectations when it comes to the generation of satisfactory returns for investors.

Difference between P/E and P/B

Price-to-earnings and price-to-book are two commonly used ratios regarding stock value. Price to book ratio is a ratio that compares a company’s market value to book value.

Book value refers to the company’s total assets minus total liabilities.

Price to book ratio underscores the value that market participants attach to a company’s equity. Companies command different P/Bs because some companies and industries are more efficient at producing income from their assets than others.

Price to book value differs from price to earnings ratio in the fact that it can be used to value firms with positive book values and negative earnings, i.e., companies that are making losses. P/E is only a useful measure for companies with positive earnings.  However, P/B can be useless when used in companies with few tangible assets in their balance sheets, such as information tech companies that mostly offer services. In addition, the metric can remain negative for long periods should a company that has more debt than assets.

Price to Book ratio is ideal for analyzing stocks in industrials as well as in the financial sector. This is in part because these companies have a stronger link between assets and income generating ability. Industrial companies have assets tied to inventory and property, such as production plants or equipment. Property and loans on the other hand account for a huge chunk of assets owned by financial institutions.

Bottom Line

Price to earnings ratio is a key financial metric for evaluating whether a stock is fairly valued. The fact that it standardizes stocks of different prices and earnings levels, call for its usage in combination with other metrics to ascertain the actual value of a stock prior to investing.

It is also important to note that a company with a high P/E ratio will always be under pressure to live up to market expectations. Investors expect such companies to register continuous earnings growth, and failure to do so always result in a stock price drop. It is for this reason that investors tend to be a little bit cautious when it comes to companies with a high P/E.

Conversely, just because a company has a lower P/E does not mean that its stock is a buy. In this case, it would be wise to do extensive research to determine why the company has a lower P/E before jumping into a trade.  Low P/E at times reflects a lack of growth potential which could make it difficult for an investor to generate significant returns in the long term.

That said, the price to earnings ratio is not the only number worth considering when planning to buy shares. Some other things to look out for include dividend rate, price to book ratio, earnings charts as well as sales figures, among other fundamentals.


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