Metrics Reference
What each screening metric measures, why it matters for value investing, and how to interpret the results.
Value Metrics
Value metrics compare a stock's price to its underlying fundamentals. Lower values suggest the market is pricing the stock cheaply relative to what the company earns, owns, or generates.
P/E Ratio (Price-to-Earnings)
How many years of current earnings you're paying for. A P/E of 15 means you pay $15 for every $1 of annual profit. Stocks below 20 are considered reasonably priced by value investors.
PEG Ratio
P/E ratio divided by earnings growth rate. Adjusts valuation for growth — a PEG below 1.0 suggests the stock is cheap relative to how fast it's growing.
P/B Ratio (Price-to-Book)
Price relative to the company's net assets (what would be left if you liquidated everything). Below 1.0 means you're buying assets for less than their book value.
Beta
How much a stock moves relative to the overall market. A beta of 1.0 moves with the market; below 1.0 is less volatile (preferred by conservative investors).
Book Value per Share
The company's net asset value divided by shares outstanding. A high book value provides a 'floor' on the stock price — you're buying real assets.
Analyst Rating
Consensus analyst recommendation, where 5 is Strong Buy and 1 is Strong Sell. Provides a professional consensus view alongside your own analysis.
12-Month Trading Range
The percentage spread between 52-week high and low. A narrow range suggests price stability; a wide range suggests volatility or recent sharp moves.
Growth Metrics
Growth metrics measure how fast the company is expanding its earnings and revenue. Value investors want growth, but at a reasonable price.
Projected Earnings Growth
Expected annual earnings growth rate based on analyst consensus. Shows whether the company is expected to grow profits in the coming years.
EPS Growth (This/Next Year)
Year-over-year earnings per share growth. Positive growth means the company is becoming more profitable on a per-share basis.
Sales Growth (5Y)
Revenue growth over the past 5 years, annualized. Sustained revenue growth indicates genuine business expansion, not just cost-cutting.
Financial Health
Financial health metrics assess the company's balance sheet strength and ability to meet obligations. They reveal whether the company can survive downturns.
Current Ratio
Short-term assets divided by short-term debts. Above 1.5 means the company can comfortably pay its bills for the next year without borrowing.
Debt-to-Equity
Total debt divided by shareholder equity. Below 1.0 means the company owns more than it owes — a sign of conservative financial management.
Debt-to-EBITDA
Total debt divided by annual operating earnings. Shows how many years of profits it would take to pay off all debt. Below 3 is healthy for most industries.
Profitability
Profitability metrics reveal how efficiently the company turns revenue into profit and shareholder value. High margins indicate competitive advantages (moats).
ROE (Return on Equity)
Net profit as a percentage of shareholder equity. Above 15% means management is generating strong returns on the capital investors have entrusted to them.
ROA (Return on Assets)
Net profit relative to total assets. Shows how effectively the company uses everything it owns to generate profit, regardless of how it's financed.
Net Profit Margin
What percentage of each dollar of revenue becomes profit after all expenses. High margins suggest pricing power and operational efficiency.
Dividend Yield
Annual dividend payment as a percentage of stock price. Provides income while you wait for value to be recognized by the market.
Dividend Payout Ratio
Percentage of earnings paid out as dividends. Below 60% means the dividend is sustainable and the company retains earnings for growth.