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What is PEG ratio?

It is the ratio of price-to-earnings ratio and annual EPS growth in percentage.

PEG= PE ratio/Annual EPS Growth(%)

The PEG ratio gives a more complete picture of stock valuation than simply viewing the price-earning (P/E) ratio in isolation.

Looking at the value of PEG of companies is similar to looking at the P/E ratio. A lower PEG means that stock is more undervalued. Generally PEG ratio of less than 1 is good for investment.