Stock & Bond Investments: Chapter $7$ Part $2$ Assignment

For questions $13,$ please complete the following columns of the chart below: Earnings Per Share $($EPS$),$ Dividend Yield, and Payout Ratio. Calculations for each item are listed below.

Earnings Per Share $($EPS$)$: Share Price $/$ Price to Earnings Ratio $($P$/$E$)$

Dividend Yield: Annual Dividend Per Share $/$ Share Price

Payout Ratio: Annual Dividend Per Share $/$ Earnings Per Shares $($EPS$)$

Ticker Company Share Price Price to Earnings Ratio $($P$/$E$)$ Annual Dividend Per Share Earnings Per Share $($EPS$)$ Dividend Yield Payout Ratio

XEL Xcel Energy $$26\mathrm{.}0513$ $$1\mathrm{.}50$

GXP Great Plains Energy $$23\mathrm{.}4710$ $$1\mathrm{.}66$

NOR Northwestern Corp. $$20\mathrm{.}5217$ $$1\mathrm{.}27$

MAP Maine Public Service $$29\mathrm{.}809$ $$1\mathrm{.}40$

CV Central Vermont P$/$S $$18\mathrm{.}9031$ $$0\mathrm{.}88$

WPS WPS Resources $$42\mathrm{.}1615$ $$2\mathrm{.}10$

LNT Alliant Energy $$27\mathrm{.}9514$ $$2\mathrm{.}00$

Please use the chart above to answer questions $48.$

$4.$ What sector or industry do these stocks represent?

$5.$ Why would you invest in these stocks?

$6.$ What is this industry$$s average P$/$E ratio? Which stocks do you believe are underpriced? Which stocks do you believe are overpriced? $($Use the information given to find the average P$/$E ratio.$)$

$7.$ What observations would you make about these stocks?

$8.$ Which stock would you consider for purchase?

$9.$ Why is competition very important when analyzing companies in a specific industry?

$10.$ Why do different industries trade at different price$-$to$-$earnings $($P$/$E$)$ ratios? Provide $2$ examples.