R/Justified_PE.R

In JancoS/EquityR: Common stock valuation methods. Including single stage DDM, multistage DDM and basic CF models. Package mainly builds on the tidyquant and finreportr packages.

#' @title Justified_PE
#' @description Calculate the justified PE's
#' @param Ticker Symbol of stock to be evaluated
#' @param Req The Required return on equity
#' @param growth_rate Optional growth_rate  otherwise calculated using Growth_Rate function
#' @export
#' @return Just_PE The justified PE as output

Justified_PE <- function(Ticker, Req, growth_rate = 0) {

  # Get the required data and date

  Tod <- lubridate::today() - lubridate::days(1)

  MData <- tq_get(Ticker, get = "key.ratios")

  # Get the latest price from the previously calculated date

  Price <- tq_get(Ticker, get = "stock.prices", From = Tod)

  # Calculate the justified PE

  EPS <- MData %>% filter(section == "Financials") %>%
    select(data) %>% unnest() %>%
    filter(category == "Earnings Per Share USD")

  # Get the latest EPS

  EPS_latest <- EPS %>% filter(row_number() == nrow(EPS)) %>% pull(value)

  # Get the latest Div

  Div_latest <- Fin %>% filter(category == "Dividends USD") %>%
    filter(row_number() == nrow(EPS)) %>% pull(value)

  # Get the growth_rate g

  if (growth_rate == 0) {

    growth_rate <- Growth_Rate(Ticker)

  } else {

    growth_rate <- growth_rate/100

  }


  # Calculate: D/E(1 + g) / (r-g)

  Justified_PE <- ((Div_latest/EPS_latest)*(1+growth_rate))/(Req - g)

  PE_Morningstar <- MData %>% filter(section == "Valuation Ratios") %>%
    select(data) %>% unnest() %>%
    filter(category == "Price to Earnings") %>%
    filter(row_number() == nrow(ROE)) %>%
    pull(value)

  Just_PE <- list(Justified = Justified_PE, Morningstar = PE_Morningstar)

  return(Just_PE)

}