When you’re looking at a bunch of companies on the stock market and trying to figure out if you should actually buy shares in one (besides through an index fund or some other kind of intermediary vehicle), timing is very tricky. One way you can tell whether that stock you have your eye on is a bargain is to look at its price-to-earnings ratio, or the multiple of its stock price over its earnings-per-share. There are different ways to do this. Backward-facing P/E can give you a feeling of how the market thinks it is doing compared to its recent financial performance. Forward-facing P/E can gauge what investors think of its near-term future.
Here are the stocks from the Dow Jones Industrial Average that have the highest forward-facing P/E ratios looking one fiscal year out, per consensus analyst estimates on FactSet. And check out the most underpriced stocks here.
