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Growth stocks can be expensive, but if you are trying to be aggressive with a portion of your investment portfolio, you often have to pay a premium for the privilege.
For example, shares of Intuit Inc.
INTU, the developer of TurboTax and QuickBooks software, have traded at an average forward price-to-earnings ratio of 35.4 over the past five years through Friday, according to FactSet. That is based on prices divided by rolling consensus 12-month earnings-per-share estimates among analysts polled by FactSet. In comparison, the S&P 500 SPX has traded at an average weighted forward P/E ratio of 20.3 over the past five years. And for that five-year period, Intuit’s stock has returned 168.5%, compared with a return of 110.6% for the S&P 500, both with dividends reinvested.
This post was originally published on Market Watch
