Peer Group

Peer Group
A group of individuals or entities who share similar characteristics and interests. Peer groups, in the case of people, have characteristics which include similarities such as socio-economic status, level of education, and ethnic background and so on amongst its individual members.

In the context of financial markets, peer group usually refers to companies that operate in the same industry sector and are of similar size.

In investment research, peer group analysis is a vital part of establishing a valuation for a particular stock. The emphasis here is on comparing "apples to apples," which means that the constituents of the peer group should be fairly similar to the company being researched, particularly in terms of their main areas of business and market capitalization.

Peer group analysis can enable investors to spot valuation anomalies for a specific stock. For example, a stock that is trading at an earnings multiple of 15 – compared with an average multiple of 10 for its peer group – could justifiably be considered to be overvalued.

Investment dictionary. . 2012.

Look at other dictionaries:

  • peer-group — peer group …   Dictionary of sociology

  • peer group — ➔ group * * * peer group UK US noun [C] ► a group of people who are similar in age, education, position, etc.: »Brands are a way of identifying with a social or economic peer group. ► a group of companies that offer similar products or services:… …   Financial and business terms

  • Peer-Group —   (Gleichaltrigengruppe): v. a. in der Jugendsoziologie verwendete Bezeichnung für außerfamiliäre Gruppen etwa gleichaltriger Kinder und Jugendlicher. Den Peer Groups kommt eine wichtige Funktion während der Ablösung von der Familie und die… …   Universal-Lexikon

  • peer group — peer groups N COUNT Your peer group is the group of people you know who are the same age as you or who have the same social status as you. It is important for a manager to be able to get the support of his peer group. ...peer group pressure …   English dictionary

  • peer group — n a group of people, especially people who are the same age, social class etc as yourself ▪ the TV shows that are popular with his peer group …   Dictionary of contemporary English

  • peer group — peer ,group noun count a group of people of the same age, social class, or education: The marketing study dealt mainly with an adolescent peer group …   Usage of the words and phrases in modern English

  • peer group — peer′ group n. psl soc a group of friends or associates, usu. of similar background, social status, and esp. age, who are likely to influence a person s beliefs and behavior • Etymology: 1940–45 …   From formal English to slang

  • peer group — ► NOUN ▪ a group of people of approximately the same age, status, and interests …   English terms dictionary

  • peer group — n. all those people of about the same age, status, etc. in a society, regarded as forming a sociological group with a homogeneous system of values …   English World dictionary

  • peer group — noun contemporaries of the same status (Freq. 1) • Hypernyms: ↑coevals, ↑contemporaries, ↑generation • Member Meronyms: ↑peer, ↑equal, ↑match, ↑compeer …   Useful english dictionary

  • Peer group — A peer group is a group of approximately the same age, social status, and interestsSiegler, Robert (2006). How Childred Develop, Exploring Child Develop Student Media Tool Kit Scientific American Reader to Accompany How Children Develop. New York …   Wikipedia

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