The PEG ratio, as referenced in the question, takes the price-to-earnings ratio and divides it by a company's projected long-term earnings growth rate.
As a general rule, a PEG ratio of 1 or lower indicates you're getting future growth at a good value.
That's what the PEG ratio attempts to capture.
Keep in mind that we also collect a dividend to compensate us for any lack of earnings growth.
These factors outweigh the PEG ratio in our view and are our primary focus right now when it comes to valuing Abbott.
Persons:
Jim Cramer, Marcia, Abbott, It's, that's, Eaton, That's, Jim
Organizations:
Abbott Labs, NEC, Abbott, CNBC
Locations:
Eaton, Washington, Cramer's