McDonald's | Industry Average - Hotels & Restaurants | Coke | Industry Average - Hotels & Restaurants | Campbell's | Industry Average - Food Products | |
P/E (Trailing Twelve Months) | 18.8% | 27.4% | 18.4% | 16.8% | 13.14% | 10.36 |
P/E (5-Year Average) | 19.5% | 28.4% | 17.8% | 21.1% | 16.18% | 28.5 |
PEG Ratio | 1.9% | 1.7% | 2.9% | 58.0% | 2.78% | 2.21% |
Price/Cash Flow (Most Recent Quarter) | 18.5% | 14.1% | 17.6% | 19.4% | 7.68% | 14.72% |
Price/Cash Flow (TTM) | 15.6% | 15.4% | 14.7% | 15.8% | 9.59% | 16.36% |
Price/Sales (Most Recent Quarter P/E) | 3.7% | 2.6% | 3.5% | 3.7% | 1.17% | 10.22% |
Price/Sales (TTM) | 3.8% | 2.8% | 3.3% | 2.9% | 1.31% | 1.34% |
Price/Book | 7.2% | 6.5% | 4.7% | 4.0% | 9.65% | 0.70% |
Definitions:
Trailing Twelve Months – the last 12 months of data. Think of this as a “rolling” metric. Trailing twelve months for October 2015 would be October 2014 to September 2015.
P/E – the price to earnings ratio or a company found by dividing the company’s current share price to its per-share earnings. Can be used for relative valuation purposes. A firm trading at a P/E of 5 appears cheap compared to a firm trading at a P/E of 20. Lower is better.
PEG Ratio – the price to earnings growth ratio, a forward-looking metric, found by dividing the stock price of a company by its earnings growth. Peter Lynch asserts that a company that is fairly priced will equal its growth rate and thus, a fairly valued company will have a PEG equal to 1.
Price / Cash Flow – similar to the price to earnings ratio except price to cash flow removes the effects of depreciation and other non-cash factors. This truly whittles the relative valuation down to the cash and is found by dividing the Share Price by the Cash Flow Per Share.
Price / Sales – a fairly useless metric that doesn’t take into account expenses or debt. It is useful when comparing similar companies. Found by dividing a firm’s current stock price by its revenue per share.
Price / Book – Also known as the price to equity ratio, it is found by dividing the current closing price of the stock by the latest quarter’s book value per share with book value being Total Assets – Intangible Assets and Liabilities. “A lower P/B ratio could mean that the stock is undervalued. However, it could also mean that something is fundamentally wrong with the company.” [i]
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