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P/E Ratio Basics

The price-to-earnings, or P/E, ratio compares a stock’s price to its annual earnings per share, or EPS. It measures how much an investor is paying for a stock compared to each dollar of a company’s annual earnings. Investors often use the P/E ratio to compare the valuation of two or more companies and help determine if a stock is overvalued or undervalued. Subscribe to our channel: https://bit.ly/SubscribeCharlesSchwab Click here for more insights and education: http://www.schwab.com/learn/ (1022-11TL)