What Is a PEG in Stocks?

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PEG in stocks is a measure of the price earnings multiple to growth, with growth being more desirable than the price earnings. Avoid using PEG statistics to measure the health of a company or stock with information from a financial adviser in this free video on the stock market.

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Video Transcript

Are you a budding stock analyst? Hi, this is Roger Groh at Groh Asset Management. If you are, maybe you're using the PEG ratio. What's PEG? Well it's the measure of price earnings multiple to growth and basically more growth is desirable than more PE. One note of caution though, frequently the accounting rules have changed and PE now has become more of an accounting statistic than a true measure of the health or well being of a company. You may want to substitute in that some multiple of cash flow or multiple of epitaph as a measure of better health in a company. Either works, PEG away. I'm Roger Groh at Groh Asset, thank you very much for spending time with me.

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