Buy Shui On Land Limited (HKG:272) Because Of Its P/E Ratio

Posted by freemexy on February 25th, 2021

Buy Shui On Land Limited (HKG:272) Because Of Its P/E Ratio


The goal of this article is to teach you how to use price to earnings ratios (P/E ratios). To keep it practical, we'll show how Shui On Land Limited's (HKG:272) P/E ratio could help you assess the value on offer. What is Shui On Land's P/E ratio? Well, based on the last twelve months it is 5.83. That corresponds to an earnings yield of approximately 17.2%.To get more shui on land news, you can visit shine news official website.

The higher the P/E ratio, the higher the price tag of a business, relative to its trailing earnings. That is not a good or a bad thing per se, but a high P/E does imply buyers are optimistic about the future.

The P/E ratio essentially measures market expectations of a company. If you look at the image below, you can see Shui On Land has a lower P/E than the average (6.4) in the real estate industry classification.

Shui On Land's P/E tells us that market participants think it will not fare as well as its peers in the same industry. Since the market seems unimpressed with Shui On Land, it's quite possible it could surprise on the upside. You should delve deeper. I like to check if company insiders have been buying or selling.

Earnings growth rates have a big influence on P/E ratios. If earnings are growing quickly, then the 'E' in the equation will increase faster than it would otherwise. Therefore, even if you pay a high multiple of earnings now, that multiple will become lower in the future. A lower P/E should indicate the stock is cheap relative to others -- and that may attract buyers.