FMC Corporation (FMC) PEG Chart

What is the Price to Earnings Growth (PEG) Ratio?

The PEG Ratio chart for FMC Corporation (FMC) compares PE to EPS Growth rates.

Defining fair value is the goal of measuring valuation using the PEG Ratio. The PEG ratio compares the PE Ratio to the EPS Growth rate of a stock to help estimate how many years of earnings growth would be required to reach the current valuation of that stock at a particular time.

Stocks are priced using a forward-looking model, the stock market is a forward-looking indicator, and the PEG ratio helps define how far ahead investors in a particular stock are looking based on its EPS growth rate. Companies growing EPS faster will have a lower PEG ratio if their PE multiples are equivalent, but often companies that are growing faster often have higher PE multiples, and equivalent PEG Ratios.

PEG Ratios help us define valuation for companies growing EPS at various rates by allowing us to compare them with a more equivalent measure. PEG Ratios are considered more valuable than PE Ratios because they account for EPS Growth rates and offer better comps than PE alone.

PEG ratios are attractive because we can use them to compare companies that are growing at different rates and they help us determine fair value across different sectors and industries.

However, PEG ratios can also be somewhat misleading when they incorporate forward looking expectations of analysts that extend beyond the next 12 months. We have determined that forward expectations of analysts are reliable about 12 months out, but beyond that they are far less reliable and therefore PEG ratios that are based on growth expectations far into the future should be taken with a grain of salt.

Preferably, we use trailing 12 month PEG ratios because those allow us to see where PEG ratios have been in the past based on trailing 12 month earnings trends and that gives us an indication of where the best times to buy or sell that stock might be. For example, we might find that the best time to buy a particular stock is when it's trailing 12 month PEG ratio is at an extreme level, and we can identify that using our trailing 12 month PEG ratio chart and then anticipate making an investment when we see the PEG ratio for that stock approach our target range again.

PUBLIC TRADING ACHIVES FOR FMC. (Real time data for subscribers only)

When Fmc (FMC) Moves Investors should Listen

January 25, 2022

Fmc FMC Pivot Points

January 15, 2022

Trend Tracker for Fmc FMC

January 05, 2022

Fmc (FMC) Trading Report

December 26, 2021

Learn to Evaluate Fmc (FMC) using the Charts

December 17, 2021

Fmc FMC Trading Report

December 07, 2021

Fmc FMC Investment Analysis

November 19, 2021

When the Price of Fmc FMC Talks, People Listen

November 09, 2021

Fmc FMC Proactive Strategies

October 30, 2021

Fmc FMC Investment Advice

October 20, 2021

Fmc FMC Investment Advice

October 09, 2021

Fmc FMC Investment Advice

September 29, 2021

Trend Tracker for Fmc FMC

September 19, 2021

How the price action of Fmc (FMC) is used to our Advantage

September 10, 2021

Learn to Evaluate Fmc (FMC) using the Charts

August 31, 2021