PEG Ratio Calculator
Relate a stock's P/E ratio to its expected earnings growth, with an optional dividend-adjusted version.
Quick answer
The PEG ratio adjusts the P/E for growth: PEG = P/E / expected annual EPS growth in percentage points. P/E is price divided by EPS. A PEG near 1 is often read as price in line with growth.
PEG Ratio Calculator
Used for the dividend-adjusted PEG. Leave blank to skip.
PEG Ratio
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Dividend-Adjusted PEG
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P/E Ratio
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P/E at a PEG of 1
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Compared with 1.0
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PEG at Different Growth Rates
| Expected Growth | PEG | Dividend-Adjusted PEG |
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Assumptions & method
- P/E = price ÷ EPS (or the P/E you enter). PEG = P/E ÷ expected annual EPS growth, with growth in percentage points (20% = 20).
- Dividend-adjusted PEG = P/E ÷ (growth + dividend yield), both in percentage points.
- "P/E at a PEG of 1" equals the growth rate, which is the multiple a PEG of 1 would imply.
- EPS must be above zero for a P/E, and growth above zero for a PEG. The growth rate is a single constant forecast.
- A PEG of 1 is a rule of thumb rather than a fair-value rule. This is an educational estimate, not investment advice.
Results are estimates based on the figures you enter. They are not guarantees and not financial advice.
How the PEG ratio works
A P/E ratio on its own can mislead, because a high multiple may be fair for a fast-growing company and expensive for a slow one. The PEG ratio puts growth into the comparison by dividing the P/E by the expected annual earnings growth rate in percentage points. A PEG near 1 suggests the multiple is in line with growth, lower values suggest a cheaper price for the growth on offer, and higher values the reverse. Adding the dividend yield to the growth rate gives a dividend-adjusted PEG that credits income as well as growth. Both depend on forecasts, so treat the numbers as estimates.