It is the basis of our Valuation Rating. This is the estimated growth of future earnings (LT Growth) plus dividend in %, divided by the estimated future PE ratio (Long Term P/E).

Our PEGYRatio measure is an index figure that compares firms on whether their stock is relatively "expensive" or "inexpensive" according to their potential earnings growth. We focus our attention on PEGYRatio measures generally between 0.9 and 1.6, as this range of the index is most likely to include firms that will outperform their peers. A PEGYRatio measure below 0.9 indicates that investors must pay a premium for the estimated growth potential; thus, the stock is relatively risky.