In order to make that valuable decision, investors should know some basic weighing method.
According to the latest data, the share price of some of the banks is equal to their net worth. Although due to the ongoing bearish trend, the group that dominates the stock market has also experienced few hiccups.
Out of 27 listed commercial banks, Nabil Bank has the highest and Civil Bank has the lowest share price however the scenario is different if one consider P/E ratio.
In terms of P/E ratio, Nepal Bank has the lowest while Standard Chartered Bank has the highest P/E ratio.
It should be noted that higher P/E means that the share is overpriced while lower P/E ratio means the share is underpriced. Normally, share price with P/E ratio of 15 times is considered ideal for investing, however, it is not the only parameter to evaluate the shares.
One should also consider growth and expansion, dividend history, EPS, dividend payout ratio, reserve fund, capital reserve ratio and corporate governance while investing their hard earned money in to share of any company.
