Advantages
Investors may prefer the PEG ratio because it explicitly puts a value on the expected growth in earnings of a company. The PEG ratio can offer a suggestion of whether a company's high P/E ratio reflects an excessively high stock price or is a reflection of promising growth prospects for the company.
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Famous quotes containing the word advantages:
“There is no one thoroughly despicable. We cannot descend much lower than an idiot; and an idiot has some advantages over a wise man.”
—William Hazlitt (1778–1830)
“The advantages found in history seem to be of three kinds, as it amuses the fancy, as it improves the understanding, and as it strengthens virtue.”
—David Hume (1711–1776)
“Can you conceive what it is to native-born American women citizens, accustomed to the advantages of our schools, our churches and the mingling of our social life, to ask over and over again for so simple a thing as that “we, the people,” should mean women as well as men; that our Constitution should mean exactly what it says?”
—Mary F. Eastman, U.S. suffragist. As quoted in History of Woman Suffrage, vol. 4 ch. 5, by Susan B. Anthony and Ida Husted Harper (1902)