Eli5: Why does Google consistently trade at a much lower P/E ration than other tech stocks?

Question

For as long as I can remember this has been the case. They generally trade at a PE under the tech stock average. Why??

In: 0

Answer 1

P/E is basically a guess at the future growth of the company. Mature companies with diverse businesses tend to have lower ratios. The trade-off for an investor is Supposed to be stability of future dividend returns, or equivalent.