JNJ has a PEG ratio of 2.67 which reflects its size and dividend.
GT has a PEG of 0.29 which indicates it is under priced.
UNH PEG of 1.67 indicates it is under priced when considering size, balance sheet and sector.
PEG is a valuation metric / ratio meaning "price earnings to growth ratio" or PEG.
If you ignore debt, cash, retained earnings cash on the balance sheet and compute the future value of a stock (based on growth and p/e ratio), the formula is: CURRENT STOCK PRICE divided by PEG ratio.
Thus if the PEG is 0.50 and the stock price is $50 the stock value is 100.
Generally you need to add in the dividend amount and cash per share amount and then subtract the debt per share.
If the company balance sheet has negative retained earnings you also need to subtract that out.
PEG is useful to determine what a stock might sell for in 12 months as a rough estimate.
The larger cap companies command a higher PEG than smaller companies. Companies that pay a dividend deserve a higher PEG.
In the case of UNH, we have a large cap and it is in a relatively conservative /necessary business of health care niche and thus deserves a PEG higher than 1.00 so long as it has a strong balance sheet .... which it does have.