Most Expensive Stock in the Market
Stock options can be considered as an alternative for buying shares. However, the most expensive stock usually does not refer to any particular company or entity. Rather it is an estimate or prediction of future earnings of a certain security. It is a technical analysis, which compares current shares prices with the expectation of future earnings. The most expensive stock is one which has the highest projected earnings growth rate over a given time period. Although such estimates do not occur in real time and hence the term investment can never be known to an exact degree.
For instance, if presently Apple Inc is the most expensive stock, then there are several companies, which may have a similar product line or target market but would be priced differently. In general, the price of any given share should be determined by various factors. One of these includes the perceived market cap, stock ratio, revenue stream and dividend yield. We shall now focus on the first two factors.
A company’s market capitalization is the measure of value that investors believe its shares are worth based on the company’s net tangible assets as of a given date. If the market cap of a company falls, the value of the shares would reduce. If the market cap is increasing, the value of the shares would appreciate. This is basically the level of earnings that investors consider desirable.
Determining the Most Expensive Stock in the Market
Stock Ratios and Dividends paid per Share are the second factors on the list which determine the most expensive stock. As we mentioned above, analysts consider earnings per share to be the most important indicator. If a dividend is offered to shareholders, it is important for investors to know whether they will be able to sell their stocks at a higher price point. There are some companies, which do not pay out any dividend. We discuss and analyse popular companies in this article, which offer high dividend yields but are also known to be highly capricious and volatile in nature.
The third factor on the list which determines the most expensive stock is the price to book ratio. By measuring the book value of the company’s shares, investors are provided with an idea of the company’s current market cap. Dividends paid on preferred and common shares can further impact the price to book ratio. There are some companies which never split their dividends and have unlimited shares available for sale on the market.
The most expensive stock in the list is usually the one with the cheapest share price. The price to book ratio indicates how many shares can be bought or sold before the company makes a profit. Dividends are usually reinvested by the shareholder into more shares of the stock which may result in a further decline in price.