i What this calculator does
Quick answer: Divide the P/E by the earnings growth rate to see whether a high multiple is justified by the growth behind it. With the default inputs (share price 185.50, earnings per share 15.20), it returns peg ratio of 1.02.
The PEG ratio divides the P/E by the expected earnings growth rate. It exists because a P/E on its own cannot distinguish an expensive company from a fast-growing one, and those are very different things.
The convention is that a PEG near 1 means the multiple is roughly matched to the growth. It is a rough guide rather than a rule, and it is only as good as the growth estimate, which is a forecast rather than a fact.
This calculator is for educational purposes only. Results are estimates and may vary depending on market conditions, spreads, commissions, platform settings, and exchange rates. It should not be considered financial advice.
How to use the PEG Ratio Calculator
The form arrives filled in. Replacing one value at a time is the clearest way to see what the output depends on.
- 1. Share Price (R)
- 2. Earnings Per Share (R)
- 3. Expected Annual Growth (%) Forecast, not history
- 4. Dividend Yield (%) Used for the dividend-adjusted PEG
The result panel reports:
- PEG Ratio P/E divided by growth
- P/E Ratio The starting multiple
- Dividend-Adjusted PEG Growth plus yield
Alongside the headline figures, the calculator reports share price, earnings per share, expected growth, p/e at peg of 1. Those are the numbers that usually explain why the headline result came out where it did.
The steps that produced the number are listed below it, which is what makes the output verifiable.
Common results
What the calculator returns as the share price changes, with every other input at its default (earnings per share 15.20, expected annual growth 12, dividend yield 3.5).
| Share Price | Peg Ratio | P/E Ratio | Dividend-Adjusted Peg |
|---|---|---|---|
| R50 | 0.27 | 3.29 | 0.21 |
| R100 | 0.55 | 6.58 | 0.42 |
| R200 | 1.10 | 13.16 | 0.85 |
| R400 | 2.19 | 26.32 | 1.70 |
| R750 | 4.11 | 49.34 | 3.18 |
| R1 500 | 8.22 | 98.68 | 6.37 |
Figures used in this calculator
The South African constants this calculator relies on, with the page that holds the current value and the date it was last verified.
- Company tax: 27%. Source: Company Tax Rates Reference (verified 29 September 2026).
- Securities Transfer Tax: 0.25% on share purchases. Source: JSE Trading Cost Schedule (verified 27 September 2026).
- JSE trading hours: 09:00 to 17:00 SAST. Source: JSE Trading Hours and Holidays (verified 27 September 2026).
How the calculation works
There are four inputs to fill in: Share Price, Earnings Per Share, Expected Annual Growth and Dividend Yield. Expected Annual Growth: Forecast, not history. Dividend Yield: Used for the dividend-adjusted PEG. The p/e is R185.50 / R15.20 = 12.20. The peg is 12.20 / 12.0 = 1.02. The pegy is 12.20 / (12.0 + 3.5) = 0.79. The p/e at peg 1 is growth of 12.0% implies a P/E of 12.0. The breakdown also lists share price, earnings per share, P/E ratio and expected annual growth.
A worked example in rand
Take the defaults as a worked case: share price R185.50, earnings per share R15.20, expected annual growth 12% and dividend yield 3.5%. The result is a peg ratio of 1.02, P/E divided by growth. Alongside it: P/E ratio 12.20 and dividend-adjusted peg 0.79. Change one input, the share price, to 371, and the peg ratio moves from 1.02 to 2.03, the P/E ratio moves from 12.20 to 24.41 and the dividend-adjusted peg moves from 0.79 to 1.57.
How to read the result
The verdict line under the result says: "A PEG of 1.02 is in the normal range. The growth forecast is doing the work." That sentence is recomputed on every run; it is a reading of the numbers, not a recommendation. Read any valuation figure against the sector average and the company's own five-year range; on its own it says almost nothing. For the reasoning, read What Is a Good Risk-Reward Ratio for Trading?.
The South African angle
The PEG ratio calculator is the same arithmetic anywhere; what differs in South Africa is the environment it runs in. A tax-free savings account can hold JSE ETFs but not individual shares, which is why valuation of single shares matters most for taxable accounts. Resource companies dominate the JSE All Share, which gives the index a cyclical character and makes sector comparison more important than for a US index when judging a ratio. The JSE requires results to be published within three months of the period end and interim results within three months of the half-year, which is the cadence at which the inputs to these calculators change. For the current numbers that sit behind the PEG ratio calculator, see the JSE indices reference.
Spotted an outdated figure? If a rate, limit or formula in this calculator no longer matches its source, email us the page and the source. A material correction is dated on the Updates Log.
Frequently asked questions
Is a PEG below 1 always good?
No. It means the multiple is below the forecast growth rate, which is a reasonable starting signal, but the forecast is the weak link. A PEG of 0.5 built on an optimistic growth estimate is worth less than a PEG of 1.2 built on a conservative one.
Which growth rate should I use?
Consensus forecast earnings growth for the next three to five years is the convention. Using one year makes the ratio volatile; using past growth assumes the future repeats. Where no forecast exists, a conservative extrapolation of the trend is better than a hopeful one.
What is the dividend-adjusted PEG?
PEGY adds the dividend yield to the growth rate before dividing. It exists because a mature company returning cash to shareholders is delivering part of its return as income rather than growth, and the plain PEG penalises that unfairly.
Does PEG work for cyclical companies?
Poorly. Resource companies on the JSE have earnings that swing with commodity prices, so any single growth figure is close to meaningless. For cyclicals, price to book and through-cycle earnings are more informative.
Who came up with PEG?
It was popularised by Peter Lynch, who used the comparison of P/E to growth rate as a quick screen. The idea is older, but the rule of thumb that a fairly priced company trades at a P/E equal to its growth rate is his.
Can PEG be negative?
Arithmetically yes, if earnings or growth are negative, but the result is meaningless. This calculator declines to print a number rather than showing one you cannot use.
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