Update: dictionary.com says twice a year... it continues with the definition with every two years: Biennial. In Britain, it seems, it might mean both... but in the U.S. biannual means twice a year.
We're talking about the price-to-earnings, or P/E, ratio. The current 12-month forward P/E ratio is 16.8, FactSet's John Butters said on Friday. This P/E ratio is above the 5-year average (13.8) and the 10-year average (14.1).. But just because stocks are expensive relative to their long-term average is no guarantee that prices are doomed to fall immediately.
Calculating the Price-to-Earnings Ratio. The P/E ratio of a company is calculated by dividing its market value per share by the earnings per share, or EPS, and companies that have a P/E ratio between 20 and 25 are considered acceptable for value investors.This metric represents the amount of money an investor is willing to pay for each dollar of earnings.For instance, a company with a P/E ratio of 20 means each dollar of earnings is expected to cost an investor $20.his metric represents the amount of money an investor is willing to pay for each dollar of earnings. For instance, a company with a P/E ratio of 20 means each dollar of earnings is expected to cost an investor $20.