The price to earnings ratio is a measurement often used to determine stock valuation. In short, P/E is used to measure what the market is willing to pay for a company based on its earnings. The trailing P/E for building materials companies in the construction sector was approximately 17.5. This meant in theory that investors would be willing to pay 17.5 (dollars or currency used) for every one the company made through earnings.
Another formula that is used by investors to measure the value of an industry or potential target company for acquisition is the enterprise value to earnings before interest, taxes, depreciation and amortization (EV/EBITDA).
Trailing and forward price to earnings ratio (PE ratio) in the construction sector in Western Europe 2023, by industry
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Leonard N. Stern School of Business. (January 5, 2023). Trailing and forward price to earnings ratio (PE ratio) in the construction sector in Western Europe 2023, by industry [Graph]. In Statista. Retrieved September 20, 2024, from https://www-statista-com.ezproxy.canberra.edu.au/statistics/1028247/price-earnings-in-the-construction-sector-in-europe/
Leonard N. Stern School of Business. "Trailing and forward price to earnings ratio (PE ratio) in the construction sector in Western Europe 2023, by industry." Chart. January 5, 2023. Statista. Accessed September 20, 2024. https://www-statista-com.ezproxy.canberra.edu.au/statistics/1028247/price-earnings-in-the-construction-sector-in-europe/
Leonard N. Stern School of Business. (2023). Trailing and forward price to earnings ratio (PE ratio) in the construction sector in Western Europe 2023, by industry. Statista. Statista Inc.. Accessed: September 20, 2024. https://www-statista-com.ezproxy.canberra.edu.au/statistics/1028247/price-earnings-in-the-construction-sector-in-europe/
Leonard N. Stern School of Business. "Trailing and Forward Price to Earnings Ratio (Pe Ratio) in The Construction Sector in Western Europe 2023, by Industry." Statista, Statista Inc., 5 Jan 2023, https://www-statista-com.ezproxy.canberra.edu.au/statistics/1028247/price-earnings-in-the-construction-sector-in-europe/
Leonard N. Stern School of Business, Trailing and forward price to earnings ratio (PE ratio) in the construction sector in Western Europe 2023, by industry Statista, https://www-statista-com.ezproxy.canberra.edu.au/statistics/1028247/price-earnings-in-the-construction-sector-in-europe/ (last visited September 20, 2024)
Trailing and forward price to earnings ratio (PE ratio) in the construction sector in Western Europe 2023, by industry [Graph], Leonard N. Stern School of Business, January 5, 2023. [Online]. Available: https://www-statista-com.ezproxy.canberra.edu.au/statistics/1028247/price-earnings-in-the-construction-sector-in-europe/