PE ratio indicates in how many years one can double their return. But it doesn't account for earnings growth.
Say a company's PE is 20 it's not necessary that earnings have to be stagnant for next 20 years, meaning one could double their return earlier than 20 years.
Is there any measure that takes average of last 3/5 years earnings and adjusts pe to arrive at estimated period to double the investment considering the growth of the companies?
I've come acroos peg ratio, but I fail to understand how It can be used to calculate no of years to double the return?