When close to half the companies in the United States have price-to-earnings ratios (or "P/E's") above 18x, you may consider W. R. Berkley Corporation (NYSE:WRB) as an attractive investment with its 12.9x P/E ratio. Although, it's not wise to just take the P/E at face value as there may be an explanation why it's limited.
W. R. Berkley certainly has been doing a good job lately as its earnings growth has been positive while most other companies have been seeing their earnings go backwards. It might be that many expect the strong earnings performance to degrade substantially, possibly more than the market, which has repressed the P/E. If you like the company, you'd be hoping this isn't the case so that you could potentially pick up some stock while it's out of favour.
NYSE:WRB Price to Earnings Ratio vs Industry July 25th 2024 If you'd like to see what analysts are forecasting going forward, you should check out our free report on W. R. Berkley.
What Are Growth Metrics Telling Us About The Low P/E?
The only time you'd be truly comfortable seeing a P/E as low as W. R. Berkley's is when the company's growth is on track to lag the market.
Taking a look back first, we see that the company grew earnings per share by an impressive 26% last year. The latest three year period has also seen an excellent 82% overall rise in EPS, aided by its short-term performance. Therefore, it's fair to say the earnings growth recently has been superb for the company.
Shifting to the future, estimates from the ten analysts covering the company suggest earnings should grow by 5.2% each year over the next three years. That's shaping up to be materially lower than the 10% per year growth forecast for the broader market.
With this information, we can see why W. R. Berkley is trading at a P/E lower than the market. It seems most investors are expecting to see limited future growth and are only willing to pay a reduced amount for the stock.
The Key Takeaway
Generally, our preference is to limit the use of the price-to-earnings ratio to establishing what the market thinks about the overall health of a company.
We've established that W. R. Berkley maintains its low P/E on the weakness of its forecast growth being lower than the wider market, as expected. Right now shareholders are accepting the low P/E as they concede future earnings probably won't provide any pleasant surprises. Unless these conditions improve, they will continue to form a barrier for the share price around these levels.
Before you settle on your opinion, we've discovered 1 warning sign for W. R. Berkley that you should be aware of.
Of course, you might find a fantastic investment by looking at a few good candidates. So take a peek at this free list of companies with a strong growth track record, trading on a low P/E.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
アメリカ国内の企業のほぼ半数がP/E比率が18倍以上である中、W. R. バークレー社(NYSE:WRB)はP/E比率が12.9倍で投資対象として魅力的である可能性があります。ただし、「P/E比率」をそのまま鵜呑みにすることは賢明ではない場合もありますので、制限されている理由があるかもしれません。
W. R. バークレーは最近、多くの企業の収益が後退している中で、収益成長がプラスであることから、良い仕事をしていると言えます。市場よりも強い収益性能の低下が大幅に緩和されることを多くの人が期待している可能性がありますが、これはP/Eが抑制された理由かもしれません。企業が好きなら、不人気な状態のときに株式を購入することができるよう、これが事実でないことを望むことになります。
NYSE:WRB 株価利益率と業種比較 2024年7月25日今後のアナリスト予測を確認したい場合は、W. R. バークレーの無料レポートをお読みください。
低P/Eから成長メトリックは何を示唆していますか?
企業の成長が市場に遅れをとる見込みがある場合に、W. R. バークレーのような低いP/E比率を本当に快適に感じるのはその時です。
オーストラリアでは、moomooの投資商品及びサービスはMoomoo Securities Australia Limitedによって提供され、オーストラリア証券投資委員会(ASIC)の管理を受けております(AFSL No. 224663)。「金融サービスガイド」、「利用規約」、「プライバシーポリシー」などの詳細は、Moomoo Securities Australia Limitedのウェブサイトhttps://www.moomoo.com/auでご確認いただけます。
オーストラリアでは、moomooの投資商品及びサービスはMoomoo Securities Australia Limitedによって提供され、オーストラリア証券投資委員会(ASIC)の管理を受けております(AFSL No. 224663)。「金融サービスガイド」、「利用規約」、「プライバシーポリシー」などの詳細は、Moomoo Securities Australia Limitedのウェブサイトhttps://www.moomoo.com/auでご確認いただけます。