Qatar Islamic Insurance Company Research Proposal

Qatar Islamic Insurance Company - Research Proposal Example Price/ Earnings Ratio: The P/E ratio determine the amount investors are willing to pay for every Qatari Riyal. The P/E ratio of the company and that of the industry are 16.67 and 20.14, which shows that company’s earnings per QAR with respect to rest of the industry is QAR 3.47 higher. Hence, the company has sufficient prospect of growth.Price/ Book value: This ratio represents a comparative measurement and relationship between market price of the stock and its book value. Essentially, it represents the proportion of company’s net assets that is accessible to the shareholders with respect to aggregate sale value of its stock. The benchmark for P/B ratio is 1 and any stock value less than that expresses undervaluation. The P/B ratio of the company and that of the industry shows that both the stocks are overvalued, while that of the industry is higher. The P/B ratio of the company illustrates that in case of solvency of Qatar Islamic Insurance Company, the stock will be v alued at 3.84 times of net asset value of the company (Alexander 105-150).Price/ Cash flow ratio: It represents the stock price with respect to cash flow per share. The P/CF ratio is an important indicator of the valuation of stock. While a single-digit value is considered as under-valuation, high values shows potential over valuation. The respective P/CF ratios for QIIC and the industry are 38.17 and 63.79. This implies that both have the propensity towards over valuation. Dividend yield can be defined as return on investment per share.