Relative PE

(redirected from Relative PE Ratio)

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 ?
Based on dividend capitalization, Holt presents a model for determining the appropriate relative PE ratio for a growth stock as compared to other stocks, whereas Malkiel presents an independent approach for valuing a growth stock relative to a non-growth stock.