DIVIDEND YIELD – HISTORIC
The dividend yield indicates how much a company pays out in dividends each year relative to its current share price. It is derived by dividing the latest full-year dividend per share by a company's price per share. Income investors will prefer companies that have higher dividend yields. On the other hand, this metric would not be significant for the growth investor since high-growth companies tend to reinvest the majority of their dividends.
PRICE-TO-EARNINGS (PE) MULTIPLE – CURRENT YEAR
The price-to-earnings (PE) multiple is derived by dividing the current price of a company by its expected earnings per share for the current year. This is considered to be a better metric than the historic PE ratio, which factors in the prior year's earnings per share. A high ratio could signal that a company is overvalued, but alternatively it may reflect investors' willingness to pay a premium on every unit of earnings. The premium could be justified if the market expects the company to grow at a faster pace than the overall sector. Growth companies tend to have high PE multiples because investors expect higher earnings growth.
ENTERPRISE VALUE TO EBITDA (EV/EBITDA) MULTIPLE – CURRENT YEAR
This essentially compares the cost of a whole company, taking into account its debt, with the amount generated by its core operations. EBITDA (earnings before interest, tax, depreciation and amortisation) ignores accounting treatments related to transactions in the past, as well as tax and interest rates. Companies with low EV/EBITDA multiples could make attractive takeover targets. The EV/EBITDA multiple is based on current year EBITDA expectations.
PRICE TO TANGIBLE BOOK RATIO – HISTORIC
This is similar to the price to book ratio, which compares a company's market capitalisation to its book value (an accounting convention that subtracts total liabilities from total assets), except it is a harsher metric since it removes the value of a company's intangible assets from the balance sheet. Intangible assets are removed because they are essentially difficult to value and hard to be sold on if a company goes bankrupt. A high price to tangible book ratio may mean that a company is overvalued. However, it may also mean that investors are willing to pay a premium for rapid growth. Investors should therefore try to understand why a company is trading at a discount or premium to its tangible book value. This metric is calculated using the previous quarter's balnce sheet data and is thus a historic measure.
RELATIVE STRENGTH INDEX – 14-DAY
This is a technical analysis gauge that measures the momentum of a share over the past 14 days. An index level between 0 and 100 is compiled by comparing the number of days the share has closed up with the number of days it has closed down over the period. Readings above 70 are conventionally thought to warn of an overbought condition, suggesting a share may be poised to encounter a downward correction. In contrast, readings below 30 point to an oversold condition that's poised to rebound.
BLOOMBERG MEDIAN ESTIMATES
This is the median average price target for a company's shares, compiled from a Bloomberg survey of analyst estimates. The median price target is generally based on a 12-month view.