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I would like to know how to calculate the P/E ratio by industry. On this website, it displays the P/E ratio for the current stock, the industry and the sector:

FINANCIALS
             DTV.O  Industry    Sector
P/E (TTM):   12.84   38.88   15.37
EPS (TTM):   4.81    --  --
ROI:         19.26   22.72   15.30
ROE:         --      23.20   18.69

Does anyone know the formula ? My problem is that I have historical data about P/E by stock, and I need to calculate the P/E radio by industry.

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    If you click on the word "Broadcasting" on that page you can find the sector Cyclical Consumer Goods & Services and Industry Broadcasting. P/E is probably weighted by market-cap of all the companies within the group. – dcaswell Sep 15 '13 at 21:10
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    Thanks, it seems you're right. In this page, in.reuters.com/sectors/industries/… the p/e by industry is the average of the P/E of all stock within this industry – Piiii Sep 15 '13 at 21:27
  • the idea of P/E by industry comes from this guy, youtube.com/watch?v=wEypGm5ahCI his strategy is basically to pick stock which P/E is below the P/E of the industry. And because I don't know if he's right or not, I was planning to check that on my historical datas. – Piiii Sep 15 '13 at 21:34
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    @user814064 - I'd not make such a blanket statement regarding P/E. It's one tool of many. And the Stock P/E compared to industry may also just be a data point, but not the only one. Low P/E may mean an underlying issue, and the earnings will drop to get that P/E back in line, not a price rise. – JoeTaxpayer Sep 15 '13 at 21:56
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    Here's a real simple article about how financial metrics like P/E can be modified without affecting a company's real value. investopedia.com/articles/02/041702.asp – dcaswell Sep 15 '13 at 22:32
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You could sum the P/E ratio of all the companies in the industry and divide it by the number of companies to find the average P/E ratio of the industry.

Average P/E ratio of industry = Sum of P/E ratio of all companies in Industry / Number of companies in industry

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I know this question is very old, but I thought of sharing my two cents in case anybody came across it.

I would propose using the median instead of the mean. This would be a robust way against outliers. If some outlier companies are way more or way less than the rest, they would affect the mean, leading to wrong interpretations of your results.

Simply order the P/Es in ascending/descending order then take the middle value in the list.

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