With the latest earnings season behind us, perhaps you're scouting around looking for some S&P/ASX 200 Index (ASX: XJO) shares that might be worth researching and potentially investing in?
This means looking over the major financial metrics of a company to determine if its current share price is overvalued, undervalued, or just right.
One of those metrics is the price-to-earnings (P/E) ratio.
As we explain in Motley Fool's Education Centre, the P/E ratio — also called the 'earnings multiple' or 'price multiple' — measures a company's current share price against its earnings per share (EPS).
What to consider when examining P/E ratios
As a general rule, ASX 200 shares with a P/E below 15 are considered cheap. Those with a P/E above 18 are considered expensive.
But, of course, nothing is that simple. We need to bear in mind a few things when interpreting P/Es.
For example, a high-quality ASX 200 stock may be deserving of a high share price (and thus a high P/E) because of its growth potential, so this doesn't necessarily indicate you shouldn't buy it.
Conversely, while a low P/E can indicate an undervalued share, it can also mean investors do not expect a high level of earnings growth from that company.
A company's P/E can also go low after a period of extraordinary earnings due to temporary variables like higher commodity prices.
When looking at P/Es, also bear in mind that P/E levels can vary between industries.
Which ASX 200 shares have P/Es below 10?
In this article, we're focusing on ASX 200 shares representing established businesses. These are not buying recommendations. We're just highlighting six examples of ASX 200 shares with P/Es below 10.
Here are six ASX 200 shares trading on P/Es below 10 right now:
JB Hi-Fi Limited (ASX: JBH) shares are trading on a P/E of 9.45 times. The JB Hi-Fi share price is currently $44.35, down 0.81% for the day so far
Harvey Norman Holdings Limited (ASX: HVN) shares are trading on a P/E of 8.86 times. The Harvey Norman share price is currently $3.815, down 0.65% for the day so far
Woodside Energy Group Ltd (ASX: WDS) shares are trading on a P/E of 6.28 times. The Woodside share price is currently $38.40, down 0.29% for the day so far
Brickworks Limited (ASX: BKW) shares are trading on a P/E of 5.64 times. The Brickworks share price is currently $24.78, down 1% for the day so far
Pilbara Minerals Ltd (ASX: PLS) shares are trading on a P/E of 5.24 times. The Pilbara Minerals share price is currently $4.05, down 0.98% for the day so far
Qantas Airways Limited (ASX: QAN) shares are trading on a P/E of 4.985 times. The Qantas share price is currently $4.985, down 0.7% for the day so far