I.

Price-Earnings ratio, which is often known as P/E, measures how much

investors are willing to pay per dollar of current earnings.

According to PNJ financial statements audited by PWC for the year ended 31
December 2021, released on 16th March, 2022, company’s EPS caculated for
2021 is 4.197. The stock’s market value recored at the end of 2021 is 96.2.
Therefore, applying the P/E ratio formula above, we can figure out the
company’s 2021 P/E ratio equals 22.92, which means investors are willing to
spend 22.92 dong for 1 dong profit from PNJ in exchange, considered to be
pretty high.

Over a 5-year period starting from 2017 to 2021, the PNJ’s P/E ratio created an
U model around with the lowest point of 13.33 in 2018. The uptrending were
recorded in the next 2 years, with 14.3 and 17.06 for 2019, 2020 respectively.
2021 marked up with the highest P/E ratio, with a gap of nearly 6 compare to
that of 2020.
This increase can be explained by the “hot rising” of the stock’s market price as
the consequence of company’s outstanding performance. By the end of April
2022, PNJ announced its accumulated net income and profit after tax as 12.912
and 866 billion VND respectively, which are 42,9% and 44,9% higher than
those by the first 4 months of 2021. In the first 4 months, the company has
completed 50% of the revenue target and nearly 67% of the year profit target
With the impressive operating results and the continued opening of  21 stores
during the Covid 19 pandemic - in which thousands of companies can’t suffer,
PNJ had proved to be one of the top worth-to-invest stocks that attract
investors’ attention. In 2022, PNJ stock is highly expected to reach a new peak,
especially when the gold’s price keeps increasing due to inflation, war, and
Covid 19 pandemic
II. Dividend payout ratio

Dividend payout ratio is the proportion of earnings paid out as dividends to

shareholders.

Looking at PNJ’s annually ratio in a big picture over 5 years:

Looking on the graph, the amount remained around 9% to 13% before rocketing
to 18.57% in 2020. However, in 2021, the recorded ratio fell down and was
recorded as 16.68% ( about 2% lower)

The dividend payout ratio can decrease for two main reasons. First, companies
could reduce annual dividend payments, and second, they could keep dividends
constant even when there is an increase in the net income
It can be regarded as PNJ, in 2021, PNJ is reinvesting more money back into
expanding its business. By virtue of investing in business growth, the company
will likely be able to generate higher levels of capital gains for investors in the
future. Therefore, it tends to attract growth investors who are more interested in
potential profits from a significant rise in share price, and less interested in
dividend income, which makes sense with what we’ve analyzed above.

III. Dividend yield ratio

The dividend yield ratio is used  to measure the rate of return amount of cash
flow you're getting back for each dollar you invest.
According to PNJ’s annually financial statement over a 5-year period

A similar trend occurred for dividend yield ratio. The amount was recorded as
0.99% and 0.73% in 2020 and 2021 respectively, with a gap of 0.26%. This is
explained by the lower dividend paid per share and higher market price per
share in 2021 – which reasons are stated upon.
Summary:

When comparing dividend payout and dividend yield ratio, it's important to
know that the dividend yield tells you what the simple rate of return is in the
form of cash dividends to shareholders, but the dividend payout ratio represents
how much of a company's net earnings are paid out as dividends.

While lower ratios do not seem to be positive signals for investors, it’s
considered to be beneficial for the company as they can save costs for
reinvesting or further use, which open a thousand future opportunity for growth
for PNJ.

In the end, it is up to each investor to decide whether a higher or lower payout

ratio is preferable. A company with a low payout ratio and lots of room to grow
can be a profitable, ground-floor investment opportunity. In contrast, investment
in an established company with a higher ratio may be a solid investment for the
future. Either way, a savvy investor will weigh the pros and cons before making
a final decision.

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I. Price-earning ratio (P/E)

P/E is a popular indicator that gives investors a better sense of the value of the
company. The P/E ratio shows the expectations of the market and is the price
you must pay per unit of current earnings (or future earnings, as the case may
be).

The ratio is considered to be essential for valuing a company’s stock, because it

indicates how profitable a company is and how profitable it will be in the future,
which has a huge impacts on investors’ decisions whether they should spend
their money on or not. Furthermore, if the company doesn’t grow and the
current level of earnings remains constant, the P/E can be interpreted as the
number of years it will take for the company to pay back the amount paid for
each share.
P/E ratio is caculated as company’s current share price divided by earnings per
share (EPS).

Because the PE ratio measures how much investors are willing to pay per dollar
of current earnings, higher PEs are often taken to mean that the firm has
significant prospects for future growth. Of course, if a firm had no or almost no
earnings, its PE would probably be quite large; so, as always, care is needed in
interpreting this ratio.

Companies with a high Price Earnings Ratio are often considered to be growth
stocks. This indicates a positive future performance, and investors have higher
expectations for future earnings growth and are willing to pay more for them.

Companies with a low Price Earnings Ratio are often considered to be value
stocks. It means they are undervalued because their stock prices trade lower
relative to their fundamentals. This mispricing will be a great bargain and will
prompt investors to buy the stock before the market corrects it. And when it
does, investors make a profit as a result of a higher stock price.

II. Dividend payout ratio

Dividend payout ratio is the proportion of earnings paid out as dividends to

shareholders, typically expressed as a percentage. It is an important indicator of
how a company is doing financially
There is no such thing as a “right” dividend payout ratio, although the ratio
tends to be similar for companies within the same industry.

Companies with ample growth opportunities at high rates of return tend to have
low payout ratios, whereas companies with limited reinvestment opportunities
tend to have higher payout ratios. The dividend payout ratio is not intended to
assess whether a company is a “good” or “bad” investment. Rather, it is used to
help investors identify what type of returns – dividend income vs. capital gains
– a company is more likely to offer the investor.

III. Dividend yield ratio

The dividend yield ratio is used  to measure the rate of return amount of cash
flow you're getting back for each dollar you invest in an equity position. In
other words, it's a measurement of how much bang for your buck you're getting
from dividends.

However, a higher dividend doesn’t always signal a high potential investment

since it costs a company growth potential. Every dollar a company pays out to
its shareholders is money that the company isn't reinvesting in itself to make
capital gains. Sometimes a high dividend yield is the result of a stock's price
tanking. The yield will mathematically rise because the price is dropping, a
scenario often referred to as a "value trap."