Consistent sales growth over the last five years indicates a company’s stability and an established, successful business model. Depending on your investment approach, you might set this parameter at over 5%, 10%, or even 20%.
How does the Price/Earnings to Growth (PEG) Ratio differ from the PE ratio? While the PE ratio only considers a company’s earnings in relation to its share price, the PEG ratio also factors in the company’s anticipated earnings growth rate. A PEG ratio under 2 often points to an undervalued company.
