Price-to-Book Ratio by Sector

The price-to-book ratio is a company’s current share price divided by its book value, or net assets, per share. Essentially, this ratio compares a company’s net worth to the value given to it by the market. A high price-to-book ratio could suggest that a stock is overvalued, while a low price-to-book ratio could suggest the opposite. Information technology has the highest median price-to-book ratio, while financials has the lowest, possibly due to the amount of assets companies in these sectors tend to have.