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The EV/EBITDA ratio could be the single-best valuation metric around.
So what happens when you invest in just these companies with low EV/EBITDA ratios?
With a return of 2,227% over the past 20 years, this strategy has simply blown away the S&P 500.
Cheap companies outperform over time, plain and simple.
If you haven’t been using EV/EBITDA as a guide, now is a great time to go through your portfolio and look up this crucial metric for each of your stocks.
The median EV/EBITDA ratio for the S&P 500 is currently 11.4x. If we own a stock with a much higher multiple, there better be a really good reason.
Raymond EV/EBITDA = 7.8
Grasim Inds EV/EBITDA =7.7
SJVN LTD EV/EBITDA =9.5
