A COMPARISON OF INVESTMENT RETURNS USING PRICE-TO-EARNINGS RATIO AND PRICE/EARNINGS-TO-GROWTH RATIO IN THE ELECTRONIC COMPONENTS INDUSTRY LISTED ON THE STOCK EXCHANGE OF THAILAND

Abstract

This independent study aimed to (1) examine the Price-to-Earnings (P/E) Ratio and Price/Earnings-to-Growth (PEG) Ratio of companies in the electronic components industry listed on the Stock Exchange of Thailand, (2) compare investment returns from stock selection using the P/E Ratio versus the PEG Ratio, and (3) determine which ratio was more effective in generating returns. The four-year average (2018-2021) P/E and PEG Ratios of eight listed companies were used to form a P/E portfolio (HANA, METCO, SVI, TEAM) and a PEG portfolio (SMT, SVI, TEAM), and quarterly returns were tracked over 20 quarters (2021 Q1-2025 Q4). Paired-samples t-tests and Wilcoxon signed-rank tests compared average returns at a .05 significance level. Results showed the P/E portfolio's average return (4.45%) was not significantly different from the PEG portfolio's (3.70%) (t = 0.760, df = 19, p = .456), and neither portfolio significantly outperformed the market (P/E vs. market: t = 1.420, p = .172; PEG vs. market: t = 1.074, p = .296). The findings do not support the hypothesis that the PEG Ratio generates higher returns than the P/E Ratio in this industry.

Keywords: P/E Ratio, PEG Ratio, Investment Return, Electronic Components Industry