FAQs
Theoretically, P/TB represents the hard assets of the company, i.e. the amount of money that shareholders would receive for each share owned if the company were to liquidate its operations.
What does price to tangible book value mean? ›
Price to tangible book value (PTBV) measures a company's market value relative to its hard or tangible assets. The tangible book value number includes all of a company's physical assets, such as its inventory, equipment, and real estate.
Why do banks use price to tangible book value? ›
As per Basel regulations, banks are required to maintain core capital adequacy as a percentage of their asset books. Hence the P/BV also becomes a proxy for the effective yields on their asset books. Specifically, when it comes to banks and other financials, the P/BV is a very good approximation of comparative metrics.
What does price to book value mean? ›
The P/B ratio measures the market value of a company's stock against its book or intrinsic value, helping investors determine whether the stock is overvalued or undervalued. Investors use this ratio to analyse companies in industries where asset values are a significant component of overall valuation.
What is the difference between price-to-book ratio and price to tangible book ratio? ›
In comparison to the price to book ratio (P/B), the price to tangible book value ratio (P/TBV) is double that value, which reflects how the P/TBV can be a more practical tool to better understand the current market valuation of a company in certain circ*mstances.
What is the price to tangible book value of AT&T? ›
As of today (2024-09-10), AT&T's share price is $21.50. AT&T's Book Value per Share for the quarter that ended in Jun. 2024 was $14.69. Hence, AT&T's PB Ratio of today is 1.46.
What is Wells Fargo price to tangible book value? ›
Hence, Wells Fargo's Price to Tangible Book Ratio of today is 1.60. During the past 13 years, Wells Fargo's highest Price to Tangible Book Ratio was 2.37. The lowest was 0.77. And the median was 1.63.
What is a good price to book value for banks? ›
Do Banks Low P/B Ratios Indicate Good Value? The banking industry's average P/B value being down near one makes it worthy of consideration by value investors who seek out companies with P/B values below two, with a particular focus on companies showing values of one or lower.
What is JP Morgan price to tangible book value? ›
JPMorgan Chase's Tangible Book per Share of Jun. 2024 for the quarter that ended in Jun. 2024 was $88.62. Hence, JPMorgan Chase's Price to Tangible Book Ratio of today is 2.33.
Can tangible book value be negative? ›
A negative book value means that a company has more total liabilities than assets. It owes more in numerical terms, but it's not automatically bad news for investors. There are many factors to consider when assessing whether this may be good, bad or indifferent regarding your investment potential with them.
The Bottom Line
A P/B ratio of one means that the stock price is trading in line with the book value of the company. Lower P/B ratios can indicate that a stock is undervalued, while higher values may indicate that the stock is overvalued or trading at a premium.
What is a good price to book value number? ›
What is a Good Price to Book Value Ratio? Value investors often prefer values lower than 1.0, which suggests that an undervalued stock may have been found. The benchmark for certain value investors, however, may frequently be equities with a less strict P/B value of less than 3.0.
What is the best price to book value? ›
Conventionally, a PB ratio of below 1.0, is considered indicative of an undervalued stock. Some value investors and financial analysts also consider any value under 3.0 as a good PB ratio.
Why do banks use tangible book value? ›
Tangible Book Value (TBV) is the value of a company's assets minus its liabilities and intangible assets. This metric provides investors with an estimate of a company's liquidation value if it were to cease operations and sell off its assets.
What is the price to tangible book value? ›
The Price to Tangible Book Value ratio (PTBV) expresses share price as a proportion of the company's tangible book value reported on the company's balance sheet. Tangible book value is calculated by subtracting intangible assets (intellectual property, patents, goodwill etc.) from the company's book value.
What is the difference between book value and tangible book value? ›
Tangible book value is the same thing as book value except it excludes the value of intangible assets. Intangible assets, such as goodwill, are assets that you can't see or touch. Intangible assets have value, just not in the same way that tangible assets do; you cannot easily liquidate them.
What is the price to tangible book value of Goldman Sachs? ›
GS (The Goldmanchs Group) Price-to-Tangible-Book : 1.48 (As of Sep. 10, 2024)
What is a good price-to-book ratio? ›
Price-to-book ratios below 1 are usually considered solid investments. A price-to-book less than 1 ratio could mean the stock is undervalued and worth buying. A price-to-book ratio greater than 1 indicates that the stock price is trading at a premium to the company's book value.
What is capital One price to tangible book value? ›
Hence, Capital One Financial's Price to Tangible Book Ratio of today is 1.27. During the past 13 years, Capital One Financial's highest Price to Tangible Book Ratio was 1.52. The lowest was 0.55. And the median was 1.15.