Where to Find A Stock's Beta?
I'm a college student trying to learn how to do DCF model on my own--i'm just curious--can you tell me where i can find the beta of a stock?
How to find a company's beta?
There are several ways that you can find beta for use in a company analysis. The main two ways that you can find a beta is by using a financial data site such as yahoo finance or a software such as Bloomberg. The other method would be to perform a regression analysis against the market. Our users explain below.
Best approach, in order:
- Bloomberg: calculates betas for you, probably the most reliable calculation. Assuming you have a lab in your school that has it, use bloomberg. Alternatively, your school might have access to CapIQ, or FactSet, you can pull up a company's beta from them. There's a service called Barra that also calculates betas.
- If none of those approaches exists - some of the free sites like Yahoo are a last resort, since they contain mistakes and the methodology is unclear.
- You can do your own regression as described above, but it suffers from its own problems
Why Shouldn't I Use Financial Data Sites to Find Beta?
Many users recommend using Yahoo Finance or Google Finance to find the beta for a company; however, other users shared some caution about using the beta from those sites.
Beta of stock as reported by Yahoo or CapiQ isn't always simply the covariance of the asset to the index. Yahoo adjusts the beta upwards to 1using a weighted average to account for short term beta calc risk
Yeah don't forget that the Yahoo Finance beta will be levered (i.e. reflecting the current capital structure of the firm) and, frankly, it may just be plain old wrong. But you know what they say, you pay peanuts, you get...
Using Regression Analysis to Find Beta
Our users explained how to find Beta by yourself below:
Run a regression (Excel function: slope) comparing the delta of the target company's stock price with the delta of the S&P 500.
However, user @DarkPool" shared caution about using this method:
Be careful about the S&P500 regression analysis. That index doesn't apply to all stocks (i.e. foreign). Don't forget to unlever and relever the beta.
Check out more with the video below:
Read More About Beta on WSO
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