Measuring Equity Returns: The Five Metrics Every Investor Should Know
About this episode
In this episode, Andy discusses the evolution of equity metrics and their importance in stock evaluation.
In this episode of Money Lessons, Andy traces the historical shift from dividend-focused investing to earnings-based valuation, showing how mandatory financial disclosure in the 1930s transformed the way investors evaluate stocks. He walks through five essential equity metrics—earnings per share (EPS), the price-to-earnings (P/E) ratio, the dividend payout ratio, the price-to-sales (P/S) ratio, and the price-to-book (P/B) ratio—explaining what each one measures and when to use it. Andy connects these modern tools back to Benjamin Graham's pioneering work in value investing and shows how they build on dividend and buyback concepts covered in earlier episodes.
More episodes of Money Lessons with Andrew Temte, PhD, CFA
- Preferred Stock Explained: The Hybrid Equity Security
- Dividends Explained: How Equity Income Works and Why It Matters
- Stock Splits and Share Buybacks: What Every Investor Should Know
- What Shareholders Actually Own: Rights, Claims, and Protections
- Stock Order Types Explained: Market, Limit, and Stop Orders
- How Liquidity Affects Stock Prices
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