Value investors focus on valuation ratios in hopes of purchasing stocks on sale, then patiently waiting for the market to realize its fair value. The price-earnings ratio, which divides a company’s earnings per share into its current share price, is a popular valuation ratio used. Value investors may also use earnings before interest, taxes and depreciation (EBITD) as the divisor, or free cash flow which subtracts capital investment cash requirements from normal operating cash flow. Read on to learn the key valuation ratios by sector and for select S&P/TSX industries and see if you can spot a company’s stock on sale.

The ETF DaddyDecember 16, 2019Valuation Ratsio, Price-Earnings Ratio, PE Ratio, Price-Sales Ratio, PS Ratio, Price-Book Ratio, PB Ratio, Price-EBITD Ratio, PEBITD Ratio, Price-Free Cash Flow Ratio, PFCF Ratio, S&P/TSX Composite Index, Discounted Stocks, Canadian Stocks, Geoffrey Learmonth Comments