Market Overview

14 Lowest PEG Ratios In The S&P 500

14 Lowest PEG Ratios In The S&P 500

The recent rotation from growth stocks to value stocks has once again revived an age-old debate on Wall Street between growth investors and value investors. There’s no question successful companies must growth their business over time, but value investors would say that growth is only a good investment for stock buyers if the price is right.

Fortunately, price-to-earnings-to-growth ratio is a value metric that incorporates both earnings per share and projected growth. PEG ratio gives value investors a way to take growth into account, potentially allowing them to avoid value trap stocks.

Macy's Inc (NYSE: M), for example, has one of the lowest PE ratios in the entire S&P 500 at just 4.8. However, it has definitely been a value trap for investors. Revenue was down 0.6% last quarter, and net income was down 48.1%. The stock is also down 47.4% year to date.

At the same time, PEG ratio can keep growth investors grounded. For a stock to have a positive PEG ratio, the company must be profitable. For the PEG ratio to be low, typically at or below 1.0, shares must be reasonably priced relative to both earnings and growth.

Lowest PEG Ratios

Here are the 14 S&P 500 stocks with the lowest PEG ratios, according to Finviz:

  1. Vornado Realty Trust (NYSE: VNO), 0.24 PEG.
  2. Marathon Oil Corporation (NYSE: MRO), 0.26 PEG.
  3. Jefferies Financial Group Inc (NYSE: JEF), 0.27 PEG.
  4. Everest Re Group Ltd (NYSE: RE), 0.28 PEG.
  5. Cabot Oil & Gas Corporation (NYSE: COG), 0.29 PEG.
  6. CBS Corporation (NYSE: CBS), 0.41 PEG.
  7. Host Hotels and Resorts Inc (NYSE: HST), 0.41 PEG.
  8. Diamondback Energy Inc (NASDAQ: FANG), 0.48 PEG.
  9. Devon Energy Corp (NYSE: DVN), 0.48 PEG.
  10. American Airlines Group Inc (NASDAQ: AAL), 0.53 PEG.
  11. Pioneer Natural Resources (NYSE: PXD), 0.55 PEG.
  12. United Airlines Holdings Inc (NASDAQ: UAL), 0.55 PEG.
  13. Cimarex Energy Co (NYSE: XEC), 0.57 PEG.
  14. Ameriprise Financial, Inc. (NYSE: AMP), 0.58 PEG.

Benzinga’s Take

PEG ratio is one of dozens of valuation metrics that are helpful in determining whether or not a stock is a good investment. However, investors shouldn’t rely too heavily on one or two metrics. The more information an investor considers and incorporates in the analysis process, the fuller their understanding will be about the company and its stock.

Do you agree with this take? Email with your thoughts.

Related Links:

10 Stocks Where Short Sellers Are Throwing In The Towel

13 Stocks With Short Squeeze Potential

Photo credit: Michael Rivera, Wikimedia


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