P/E vs Peers: A Canada-First Comparison Guide

“Cheaper than its peers” is one of the most common claims about a stock. It is only useful if the peers are truly comparable and the P/E figures are built the same way. On the TSX, where some sectors have only three or four listed companies and many issuers report in US dollars, that takes extra care.

This post is about P/E specifically. For the general method of building a peer group, see how to use peer tables without cherry-picking comps; for US comparisons, see how to compare a TSX stock to its US peer fairly. It is educational; figures are hypothetical.

Direct answer

Choose 4 to 8 peers with the same business model (not just the same sector label). Calculate every P/E on the same basis: same EPS type, same trailing or forward period, same currency, and calendarized if fiscal years differ. Compare with the median, not the average. Then explain any gap with fundamentals such as growth, return on equity, leverage and risk. A gap you cannot explain is a question, not a bargain.

Canada-first peer set rules

Rule	Why it matters on the TSX
Match the business model	“Industrials” mixes rails, waste, engineering and aerospace
Few Canadian peers? Add US or global peers, flagged	Some sectors have only 3–4 TSX names
Same reporting currency, or convert	Many TSX issuers report in USD
Calendarize fiscal years	Big Canadian banks have October 31 year ends; others use December
Same EPS basis	Mixing adjusted and IFRS EPS can move P/E by several turns
Exclude loss-makers or show them as “n/m”	Negative P/E is meaningless
Note size and liquidity	Small, thinly traded names often trade at a discount

Calendarizing a fiscal year (hypothetical)

A peer with an October 31 year end has EPS of $8.00 for fiscal 2025 and $8.80 expected for fiscal 2026. To compare with December year-end peers on a calendar 2025 basis, note that calendar 2025 includes 10 months of fiscal 2025 (January to October 2025) and 2 months of fiscal 2026 (November and December 2025):

Piece	Calculation	EPS
10/12 of fiscal 2025	8.00 × 10 ÷ 12	6.67
2/12 of fiscal 2026	8.80 × 2 ÷ 12	1.47
Calendar 2025 EPS	Sum	8.13

The difference is small here, but it grows when earnings are changing fast.

Peer table template

Company	Price (CAD)	EPS basis	TTM EPS (CAD)	P/E	EPS growth (3 yr)	ROE	Net debt / EBITDA
Your company		Diluted IFRS
Peer A		Diluted IFRS
Peer B		Diluted IFRS
Median

Adding growth, ROE and leverage columns stops you from reading P/E alone. If you need the inputs, calculate P/E in CAD from filings for each name.

Checklist

Step	Done when
Peers chosen	Same business model, with reasons written down
Basis aligned	Same EPS type, period and currency for every name
Fiscal years aligned	Calendarized where year ends differ
Median used	Outliers shown but not driving the comparison
Gap explained	Growth, ROE, leverage, risk compared
Conclusion written	Discount or premium and whether it looks justified

Go deeper

A peer comparison is one of three checks in triangulating multiples, DCF and peer checks. For a step-by-step comparison of two names, see how to compare two TSX peers side by side. A stock screener can speed up the first pass; see screener filters that match your process.

Related reading

• What P/E means for Canadian DIY investors
• When P/E misleads on TSX stocks
• Myth: a low P/E always means cheap
• What is ROE?

Sources

• IAS 33 Earnings per Share.
• Company annual reports for fiscal year ends and reporting currency.
• Bank of Canada daily exchange rates for currency conversion.

Media credits

• Hero: “Front Street at Bay Street in Toronto, May 22 2026.jpg” by Dillan Payne, CC BY-SA 4.0, via Wikimedia Commons. Cropped and resized to 1280x720. Real photograph of Front Street at Bay Street in Toronto, not AI-generated.

By Andrew · stocksummarizer.com