"Which has a higher P/E - Procter & Gamble (PG) or Google (GOOG)," asks the WSJ's Tom...

"Which has a higher P/E - Procter & Gamble (PG) or Google (GOOG)," asks the WSJ's Tom Lauricella. Enthusiasm for anything with yield has driven the P-E ratios of dividend payers (DVY) like P&G maybe way too high. Techs (XLK) with double-digit earnings growth, no debt, and massive cash balances trade at 12x, says MFS' James Swanson, while a utility (XLU) in Ohio is at 16x. "How far do you go with this game?" "Pretty far," says Templeton's Donald Taylor. "The macro environment (causing this) is not at all likely to change anytime soon."

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Comments (7)
  • COS911
    , contributor
    Comments (43) | Send Message
    Well the answer is that GOOG has a higher P/E ratio than P&B (24 to 17), so his thesis is wrong from the start.
    29 Apr 2013, 01:10 PM Reply Like
  • Cdpete1
    , contributor
    Comments (103) | Send Message
    What is GOOG's P/E adjusted for cash and marketable securities? Then adjust for differential growth rates, CapEx (reinvestment), etc.


    Which one is cheaper? These things are never as clear as a single metric.
    29 Apr 2013, 05:04 PM Reply Like
  • sikkabooyah
    , contributor
    Comments (457) | Send Message
    Single metric example: If your measure of native intelligence is a person's mental ability to multiply two four-digit numbers and then to spit out the correct answer immediately, it follows that Rainman is the smartest guy in the room.
    30 Apr 2013, 09:38 AM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (10599) | Send Message
    Dividend weighting has worked out well so far:


    29 Apr 2013, 01:32 PM Reply Like
  • Jack Staub
    , contributor
    Comments (93) | Send Message
    Today a pile of 10 year treasuries has an effective PE of 60, and that's not likely to change anytime soon. So that makes P&G's PE of 19.6 look cheep even before you consider its 3.1% dividend. But if you want something really inexpensive, look at Apple's PE of 10 and 2.8% dividend!
    29 Apr 2013, 01:50 PM Reply Like
  • dctodd27
    , contributor
    Comments (119) | Send Message
    Maybe simply looking at TTM (or worse, forward) PE ratios is not as informative as most would believe...
    29 Apr 2013, 02:03 PM Reply Like
  • mookdog3
    , contributor
    Comments (8) | Send Message
    Buy schb and go live life
    29 Apr 2013, 11:23 PM Reply Like
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