Samsung's P/E ratio overtakes Apple's for the first time

Samsung's strong performance in the second quarter of this year has renewed investor confidence in the company. Its share price is surging to new record highs aided by its $10 billion stock buyback and for the first time ever, Samsung's P/E ratio or price-to-earnings ratio has crossed that of its rival Apple. P/E ratio is a way of looking at a company's value by measuring its current share price relative to its earnings per share. It reflects the dollar amount that an investor can expect to invest in a company so as to receive one dollar of that company's earnings.

Samsung's shares are trading at a P/E ratio of 13.41 on the local exchange today while Apple's P/E ratio remains at about 12.23. The widest gap between the two companies' P/E ratio was witnessed back in 2013 when Apple's P/E ratio was 12.14, almost double that of Samsung's 6.93. The gap has been coming down since then and now Samsung has finally crossed its rival.

Disclaimer: This is not a call on Samsung stock and should not be taken as one, it is merely a commentary on its P/E ratio.

Adnan Farooqui - Executive Editor

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First Samsung device: SGH-E900

Adnan Farooqui is a long-term writer at SamMobile. Based in Pakistan, his interests include technology, finance, Swiss watches and Formula 1. His tendency to write long posts betrays his inclination to being a man of few words.

Via General Apple Samsung