It wasn't a good close of the week for NatWest investors, who have watched their shares sinkon Friday by -8.4% to a price of $5.24. Some of you might be wondering if it's time to buy the dip. If you are considering this, make sure to check the company's fundamentals first to determine if the shares are fairly valued at today's prices.
NatWest Group plc, together with its subsidiaries, provides banking and financial products and services to personal, commercial, corporate, and institutional customers in the United Kingdom and internationally. The company belongs to the Financial Services sector, which has an average price to earnings (P/E) ratio of 13.34 and an average price to book (P/B) ratio of 1.95. In contrast, NatWest has a trailing 12 month P/E ratio of 8.7 and a P/B ratio of 1.3.
P/B ratios are calculated by dividing the company's market value by its book value. The book value refers to all of the company's tangible assets minus its liabilities -- meaning that intangibles such as intellectual property, brand name, and good will are not taken into account. Traditionally, a P/B ratio of around 1 shows that a company is fairly valued, but owing to consistently higher valuations in the modern era, investors generally compare against sector averages.
NatWest has moved -21.2% over the last year compared to -15.4% for the S&P 500 -- a difference of -5.7%. NatWest has a 52 week high of $7.54 and a 52 week low of $4.71.
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