How to judge the valuation level of a company or industry? How to use valuation indicators?

We usually use P/E ratio and P/B ratio when valuing a company. But different industries and companies are suitable for different valuation indicators. What are the commonly used valuation indicators? How should different industries be valued? Let's take a look today. Company valuation methods are usually divided into two categories, one is relative valuation, and commonly used indicators include price-earnings ratio valuation, price-to-book ratio valuation, PEG valuation, sales rate valuation, sales income method valuation and so on. The other is absolute valuation, such as discounted cash flow method DCE and dividend discount model DDM. In the public service industry, the relative stability of profits is stronger and the periodicity is weaker, which can be based on the previous year's profits, so it is more suitable to use the price-earnings ratio valuation method. P/E ratio is easy to misjudge companies with unstable performance. Steel, cement and other industries, which have strong periodicity, a large number of fixed assets and relatively stable book value, are more suitable for the valuation method of P/B ratio. Banks and other industries have obvious characteristics of high proportion of current assets, so it is more appropriate to adopt the valuation method of P/B ratio. The real estate industry pays attention to the difference between the book value and the actual value of assets, so it is more suitable for NAV valuation method, that is, the net asset value. The real estate industry can also be viewed in combination with the price-earnings ratio valuation method. TMT, biomedicine, network software development industry, the growth of these industries is generally good, PEG valuation method can be used. Highway transportation, telecom operation, these industries pay great attention to stability in the operation process, and EV/BEITDA valuation method can be used. For the retail industry, the valuation method of sales rate index can be considered because of the relatively stable sales revenue and small fluctuation. Different valuation methods are suitable for different industries, and there is no question of which is better or worse.