Trailing Price-To-Earnings (Trailing P/E) Definition.

The trailing price-to-earnings ratio (trailing P/E) is a valuation ratio of a company's current share price compared to its per-share earnings over the last 12 months. The trailing P/E is a popular valuation metric because it is easy to calculate and covers a longer time period than other P/E ratios, such as the forward P/E ratio.

The formula for calculating the trailing P/E ratio is:

Trailing P/E ratio = share price / earnings per share (EPS)

For example, if a company's share price is \$30 and its EPS is \$2.50, then its trailing P/E ratio would be 12. This means that the company's shares are currently trading at 12 times their earnings over the last 12 months.

Investors often use the trailing P/E ratio to compare different companies within the same industry. A higher P/E ratio usually indicates that a company's shares are more expensive than its competitors. However, there are many other factors that can affect a company's P/E ratio, such as its growth prospects, profitability, and risk.

One limitation of the trailing P/E ratio is that it only looks at a company's past performance. This can be misleading if a company is experiencing rapid growth or if its earnings are volatile. For these reasons, it is important to consider other valuation ratios, such as the forward P/E ratio, when making investment decisions. What is a good PE ratio by industry? There is no definitive answer to this question as it depends on the specific industry in question. However, as a general rule of thumb, a good PE ratio is typically considered to be anything below 20. This means that the stock is trading at a price that is less than 20 times its earnings per share. industries with higher growth potential may have higher PE ratios, while those with slower growth potential may have lower PE ratios.

What is a good dividend growth rate?

The dividend growth rate is the rate at which a company's dividend payments increase over time. A company's dividend growth rate is important to investors because it provides insight into the company's future profitability and earnings potential. A company with a high dividend growth rate is typically expected to generate strong earnings growth in the future.

The dividend growth rate is calculated by dividing the company's dividend per share for the most recent year by the company's dividend per share for the prior year. For example, if a company's dividend per share in 2018 was \$1.00 and its dividend per share in 2017 was \$0.50, its dividend growth rate would be 100%.

A company's dividend growth rate can vary over time, and is often affected by factors such as the company's profitability, cash flow, and business model. For example, a company that is growing rapidly may have a high dividend growth rate in the early years, but may slow down as it matures.

There is no one "right" answer to the question of what is a good dividend growth rate. The answer will depend on the individual investor's goals and objectives. Some investors may prefer companies with high dividend growth rates, while others may prefer companies with more moderate growth rates. What is better low or high PE ratio? The price-to-earnings ratio (P/E ratio) is a financial ratio used to measure the relative attractiveness of an investment. A higher P/E ratio means that investors are willing to pay more for a given stock.

There is no definitive answer to whether a low or high P/E ratio is better. It depends on the individual investor's goals and preferences. Some investors may prefer stocks with low P/E ratios, expecting them to have more upside potential. Other investors may prefer stocks with high P/E ratios, expecting them to provide steadier returns.

How is justified trailing PE calculated?

The trailing price-to-earnings ratio is calculated by dividing a company's stock price by its earnings per share (EPS) for the most recent 12-month period.

This ratio is sometimes called the "last twelve months" (LTM) PE ratio, since it is based on the earnings from the last 12 months. The trailing PE ratio can be useful for comparing companies that have different fiscal year end dates.

The formula for the trailing PE ratio is:

Trailing PE Ratio = Stock Price / EPS

where:

Stock Price = the closing price of the stock on the last trading day
EPS = the earnings per share for the most recent 12-month period

For example, assume Company XYZ has a stock price of \$100 and EPS of \$5 for the most recent 12-month period. The trailing PE ratio would be calculated as:

Trailing PE Ratio = \$100 / \$5 = 20

Company XYZ would be said to have a trailing PE ratio of 20.

What is a trailing EPS?

A trailing EPS is an earnings per share ratio that uses data from the most recent four quarters. This metric is used to give investors an idea of a company's recent profitability.

The EPS is calculated by dividing a company's net income by the number of shares outstanding. The trailing EPS gives a more accurate picture of a company's recent profitability because it includes data from the most recent four quarters.

The trailing EPS is a valuable metric for investors because it can give them an idea of a company's recent profitability. This information can be helpful when making investment decisions.