PEG ratio: what it is and how to read it
The PEG ratio relates the P/E to expected earnings growth. It lets you compare a fast-growing company with a slow-growing one without penalizing the first for its higher P/E.
How it is calculated
PEG = P/E / expected annual earnings growth (in %). A P/E of 30 with 30% growth gives a PEG of 1.
How to read it
Below 1, the price looks moderate for the expected growth; above 2, you are paying quite a lot for it. It is useful for growth companies; for mature companies that barely grow it says little.
PEG ratio in the MeridIAn ranking
Among the 1,845 companies in the ranking with data, the median PEG ratio is 1.38: half are below and half above. The lowest 25% are below 0.78 and the highest 25% above 2.21.
For example: NVIDIA, 0.29; Apple, 2.72; Alphabet, 1.25; Banco Santander, 0.88.
By sector
| Sector | Median | Companies with data |
|---|---|---|
| Basic Materials | 1.25 | 128 |
| Communication Services | 1.43 | 82 |
| Consumer Cyclical | 1.14 | 199 |
| Consumer Defensive | 1.75 | 116 |
| Energy | 1.22 | 91 |
| Financial Services | 1.30 | 311 |
| Healthcare | 1.30 | 163 |
| Industrials | 1.46 | 352 |
| Real Estate | 2.97 | 77 |
| Technology | 1.17 | 244 |
| Utilities | 2.08 | 82 |
Lowest PEG ratio
What to watch out for
If expected growth is tiny or negative, the PEG explodes or becomes meaningless. And it all depends on the growth forecast coming true.
Related metrics
All metrics in the glossary → · Stocks by sector and country → · Ready-made screeners →
General information for educational purposes, not investment advice. Figures from the latest weekly analysis (Oct 8, 2026) with the latest available price.