What is the PEG ratio?

The PEG ratio is the P/E ratio divided by the earnings growth rate. Peter Lynch's rule of thumb: a fairly priced growth company has a PEG around 1.0 — below 1 is potentially undervalued, above 1 means you may be overpaying for the growth.

What's the difference between PEG and PEGY?

PEGY adds the dividend yield to the growth rate in the denominator: P/E ÷ (growth % + dividend yield %). It rewards dividend-paying stocks, which a plain PEG penalises for growing more slowly. Lynch used PEGY for income-paying names.

How do you get a fair value from PEGY?

If a fair PEGY is 1.0, the fair P/E equals growth + yield, so fair value per share = EPS × (growth % + dividend yield %). This calculator shows that fair value alongside the ratio.

What are the limits of PEG/PEGY?

They rely on a growth estimate that may not hold, and they break down for unprofitable companies (no meaningful P/E) and cyclicals (earnings swing). Treat a low PEGY as a lead to investigate, not a verdict.

Peter Lynch

PEG & PEGY Ratio Calculator

Peter Lynch's growth-adjusted value — is the price fair for the growth you're buying?

PEGY = P/E ÷ (earnings growth % + dividend yield %)

EPS (TTM)

Trailing-twelve-month earnings per share.

Earnings growth

Expected annual growth (Lynch used 5-yr).

Dividend yieldoptional

The Y in PEGY. Leave blank for plain PEG.

Current priceoptional

Add it to get the PEG / PEGY ratio + verdict.

Enter EPS and an earnings-growth rate (dividend yield and price are optional).

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How it works

Peter Lynch's insight was that a stock's P/E ratio only means something next to its growth rate. A company growing earnings 30% a year at a P/E of 25 can be cheaper than one growing 5% at a P/E of 12. The PEG ratio captures that — P/E ÷ growth — and a PEGY adds the dividend yield so income stocks get their due.

A ratio around 1.0 is roughly fair; below 1 the market may be underpricing the growth; above 1 you're paying up. Flip it around and a fair PEGY implies a fair P/E of growth + yield — so fair value per share is EPS × (growth + yield), which this tool computes for you.

Frequently asked

What is the PEG ratio?: The PEG ratio is the P/E ratio divided by the earnings growth rate. Peter Lynch's rule of thumb: a fairly priced growth company has a PEG around 1.0 — below 1 is potentially undervalued, above 1 means you may be overpaying for the growth.
What's the difference between PEG and PEGY?: PEGY adds the dividend yield to the growth rate in the denominator: P/E ÷ (growth % + dividend yield %). It rewards dividend-paying stocks, which a plain PEG penalises for growing more slowly. Lynch used PEGY for income-paying names.
How do you get a fair value from PEGY?: If a fair PEGY is 1.0, the fair P/E equals growth + yield, so fair value per share = EPS × (growth % + dividend yield %). This calculator shows that fair value alongside the ratio.
What are the limits of PEG/PEGY?: They rely on a growth estimate that may not hold, and they break down for unprofitable companies (no meaningful P/E) and cyclicals (earnings swing). Treat a low PEGY as a lead to investigate, not a verdict.

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Educational Use Only · Not Financial Advice

Analysis, scores, valuations, and buy zones are derived from publicly documented investor frameworks (Buffett, Lynch, Benjamin Graham, Phil Town) for learning purposes only. They are not recommendations from licensed financial advisors. Past performance does not guarantee future results. Prices may be delayed up to 15 minutes. Always conduct your own research before making any investment decisions.