Written by P/E Ratio:
The Price-to-Earnings ratio helps determine if a stock is overvalued or undervalued based on its earnings potential.
- Price-to-Book Ratio (P/B): This ratio compares a company’s market value to its book value, helping investors assess if a stock is priced fairly.
- Return on Equity (ROE): A high ROE indicates that a company is effectively using its equity to generate profits, which is favorable for investors.
- Debt-to-Equity Ratio: Measures a company’s debt levels in comparison to its equity. A high ratio can signal financial risk.
- Dividend Yield: For income-seeking investors, a solid dividend yield is a good indicator of the stock’s ability to generate consistent income.
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