Valuation indicators
Valuation indicators answer a central question: is the stock expensive or cheap relative to its fundamentals? They are calculated from the share price combined with the company's financial data.
P/E
Price-to-Earnings Ratio
Price / EPS
Number of years of earnings paid for. The most widely used ratio. Sensitive to financial structure and exceptional items.
Small-cap benchmark: 8–20x
P/B
Price-to-Book
Price / Book value per share
Multiple of net assets. Useful for sectors with tangible assets. P/B < 1 with positive ROE = a sign of a discount.
Small-cap benchmark: 0.8–2x
EV/EBITDA
Enterprise Value / EBITDA
EV / EBITDA
A valuation multiple independent of financial and tax structure. The standard for sector comparison.
Small-cap benchmark: 6–12x
FCF Yield
FCF yield
FCF / Market cap × 100
Share of FCF generated per euro invested. Independent of accounting choices. > 8% = a potential discount.
Buy signal: > 8%
EV/Sales
EV to Revenue
EV / Revenue
Useful for unprofitable or fast-growing companies. Allows valuation even without earnings.
Growth tech: 1–5x revenue
PEG
Growth-adjusted P/E
P/E / EPS growth rate
Factors growth into the P/E. PEG < 1: potentially undervalued relative to its growth.
Attractive: < 1
Yield indicators
DIV
Dividend yield
Annual dividend / Price × 100
Annual income as a % of the price. A high yield can signal an income stock or a threatened dividend.
Watch threshold: > 6% to check
PAYOUT
Payout ratio
Dividend / Net income × 100
Share of earnings paid out as dividends. Above 80%, the dividend is hard to maintain if results fall.
Sustainable: < 70%
Market indicators
β
Beta
Cov(stock, market) / Var(market)
Sensitivity to market movements. β > 1 = more volatile than the market. β < 1 = defensive. Small caps often have β > 1.
Typical small caps: 1.2 – 1.8
VOL
Historical volatility
Annualised standard deviation of returns
Amplitude of price moves. Small caps: 25-50%. Large caps: 15-25%. Useful for sizing positions and stops.
Small caps: 25 – 50%/yr
ATR
Average True Range
Average high/low range over N days
Recent volatility in absolute terms (€). Useful for placing a stop loss consistent with the stock's actual volatility.
Stop loss: 2–3 × ATR
FLOAT
Free float
% of capital freely tradable
Fraction of capital actually available to investors (excluding the controlling shareholder). A low free float amplifies volatility.
Euronext Growth: often 20–60%
Multi-indicator calculator
Multi-indicator stock calculator
12.5x
P/E
1.43x
P/B
10.0x
EV/EBITDA
6.0%
FCF Yield
2.3%
Dividend yield
1.04
PEG
All these indicators calculated automatically
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Screener Small Caps computes all of these indicators across 800+ European small caps and aggregates them into a composite 0-100 score.
Frequently asked questions
P/E (price / earnings), P/B (price / book value), EV/EBITDA (enterprise value / EBITDA), FCF Yield (free cash flow / market cap), dividend yield. Each measures a different dimension of valuation.
Beta measures sensitivity to market movements. β = 1: tracks the market. β > 1: more volatile. β < 1: defensive. Small caps typically have a beta of 1.2 to 1.8.
Yield = annual dividend / price × 100. A yield > 4-5% can indicate an income stock or a threatened dividend. Check the payout ratio (dividend / earnings): ideally below 70%.
The annualised standard deviation of daily returns. Small caps: 25-50% per year typically. Large caps: 15-25%. Useful for sizing positions and calibrating stops.
The P/E is affected by financial structure (interest) and taxation. EV/EBITDA is independent of both. To compare companies with different levels of debt, EV/EBITDA is consistently more robust.