Relative PE

Relative PE

A firm or industry's price to earnings ratio divided by the market price to earnings ratio.

Relative PE

The price-earnings ratio of a company compared to other companies in the same industry or other companies of the same size. The relative PE is useful in helping people make investment decisions. One may desire a higher relative PE or a lower PE, depending on one's investment strategy.
References in periodicals archive ?
A relative PE is the ratio of a firm's PE to the average PE of the market.
Half of these firms had lower than average relative PEs.