P/E or Enterprise Value/EBITA of a stock

[DividendGarden]

Hi, Ryan. EBITDA is useful for something, but I would say that more investors are using P/E and many other metrics (dividend yield %, P/B, ROIC, etc) as opposed to EBITDA. EBITDA can be insightful if you are comparing the operating earnings of two companies in the same industry so you can compare vs. a benchmark or industry standard. But, EBITDA has many limitations. EBITDA is not actual earnings, because you are intentionally excluding the cost of doing business.