One way to think of stock valuation is that it's a way to measure bang-for-the-buck: For each dollar you spend on a stock, what are you likely to get back? Since companies have different share prices and different numbers of shares, analysts break down the value of a company's stock into a number of per-dollar values so that you can compare one stock to another more accurately.

The type of number that analysts use to express valuation is called a multiple — a measure of a stock's price against some measure of its value, expressed as a ratio. The most commonly used multiple is the price-to-earnings ratio (P/E), but it's just one of many you may find in a report. Following are explanations of some of the most common valuation numbers you're likely to encounter.

Sam Stovall,
Chief Investment Strategist at Standard & Poor’s

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