What Is P/B Ratio in Nigerian Stocks?

P/B Ratio in Plain English

P/B (price-to-book) compares market price to book value per share. It helps you see how expensively a stock is trading relative to its net asset base.

Why Beginners Should Care

P/B is especially useful in sectors where balance sheet quality matters a lot, such as banks and insurers. It helps investors evaluate whether current price has strong asset support.

How to Interpret P/B Safely

A lower P/B can indicate cheaper valuation, but that does not guarantee quality. A business with weak profitability can stay cheap for long periods.

• Low P/B + strong returns can be interesting.
• Low P/B + weak profitability can be a trap.