How do you calculate the P/E ratio by industry?

Question

I would like to know how to calculate the P/E ratio by industry. On this website, it displays the P/E ratio for the current stock, the industry and the sector:

FINANCIALS
             DTV.O  Industry    Sector
P/E (TTM):   12.84   38.88   15.37
EPS (TTM):   4.81    --  --
ROI:         19.26   22.72   15.30
ROE:         --      23.20   18.69

Does anyone know the formula ? My problem is that I have historical data about P/E by stock, and I need to calculate the P/E radio by industry.

Computernerd · Accepted Answer

You could sum the P/E ratio of all the companies in the industry and divide it by the number of companies to find the average P/E ratio of the industry.

Average P/E ratio of industry  = Sum of P/E ratio of all companies in
  Industry / Number of companies in industry

Michael Azer · Answer

I know this question is very old, but I thought of sharing my two cents in case anybody came across it.

I would propose using the median instead of the mean. This would be a robust way against outliers. If some outlier companies are way more or way less than the rest, they would affect the mean, leading to wrong interpretations of your results.

Simply order the P/Es in ascending/descending order then take the middle value in the list.

How do you calculate the P/E ratio by industry?

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