# How do you calculate the P/E ratio by industry?

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.

• 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. Sep 15 '13 at 21:10
• 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 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. Sep 15 '13 at 21:34
• @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. Sep 15 '13 at 21:56
• 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 Sep 15 '13 at 22:32