Explanations of key stock metrics like P/E, P/B, ROE
Stock analysis can seem overwhelming when you first start investing. There are dozens of financial ratios and data points available for every company. The good news is that you do not need to master all of them to do meaningful stock research. Here are five key metrics that every beginner investor should know. 1. Price-to-Earnings…
For many investors — especially those interested in generating regular income from their portfolio — dividend yield is one of the most important metrics to understand. But what exactly is it, and how should a beginner investor use it? What Is Dividend Yield? Dividend yield tells you how much a company pays out in dividends…
When you look at a stock, one of the first pieces of information you will see is its market capitalization, often called “market cap.” It is a simple but important number that tells you how big a company is — and it can significantly affect how you evaluate an investment. What Is Market Capitalization? Market…
When experienced investors talk about the quality of a business, they often mention ROE. Return on Equity is one of the most important measures of how well a company is using the money its shareholders have invested. But what does it actually mean — and how should beginners use it? What Is Return on Equity…
When evaluating whether a stock is reasonably priced, the P/B ratio gives investors a different angle than the P/E ratio. While P/E focuses on a company’s earnings, the P/B ratio looks at the relationship between a stock’s price and its underlying assets. In this guide, we will explain what the P/B ratio is, how to…
If you have ever looked at a stock and seen a number labeled “P/E” next to the price, you have encountered one of the most widely used metrics in stock analysis. But what does it actually mean — and how should a beginner investor use it? In this guide, we will explain the P/E ratio…