Editor’s note: This article was first published in October 2013 and its data are from that time. Several companies no longer trade under these names: US Airways merged with American Airlines in December 2013, KKR Financial was absorbed by KKR in 2014 and Ares Capital acquired American Capital in 2017.
In terms of P/E, here are the stocks with the lowest price-to-earnings ratios on Wall Street. As you can see, the big winner is Warren Buffett’s Berkshire Hathaway, with a P/E of 0.01.
Definition of P/E (price-to-earnings ratio):
The P/E is calculated by dividing the stock’s market price by its annual net earnings per share (EPS).
P/E = Share price / EPS.Basically, the P/E tells us how many years it would take to earn back the investment, and it serves as one more indicator when trying to work out whether a stock is cheap or expensive. In theory, the lower its P/E, the cheaper a stock is, although we must bear in mind that the P/E is calculated with current earnings, not future earnings.
| # | Company | Ticker | P/E |
|---|---|---|---|
| 1 | Berkshire Hathaway, Inc. | BRKB | 0.01 |
| 2 | MPG Office Trust, Inc. | MPG | 0.48 |
| 3 | Newcastle Investment Corp. | NCT | 2.73 |
| 4 | BP plc | BP | 5.15 |
| 5 | CVR Energy, Inc. | CVI | 5.47 |
| 6 | KKR Financial Holdings LLC | KFN | 5.61 |
| 7 | InterDigital, Inc. | IDCC | 6.25 |
| 8 | American Capital, Ltd. | ACAS | 6.38 |
| 9 | Constellation Brands, Inc. | STZ | 6.51 |
| 10 | US Airways Group, Inc. | LCC | 6.64 |
Featured image: Stsmith, CC BY-SA 4.0, via Wikimedia Commons.
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