New Delhi, June 4 -- The price-to-earnings (P/E) ratio is one of the most common metrics for valuing a stock. However, this ratio considers only the static earnings and not the earnings growth over a period.

This means that two companies with the same earnings may appear equally valued under the P/E ratio, even if one's profit is growing 20% annually while the other is growing at just 5%.

This is where the price-to-earnings-to-growth (PEG) ratio becomes useful. By incorporating earnings growth, the PEG ratio provides a more comprehensive view of whether a stock is fairly valued relative to its earnings growth.

So, let's explore what the PEG ratio is, how it differs from the P/E ratio, and how you can value a stock using the PEG ratio....