Is HIO undervalued based on its PEG ratio?

A PEG below 1.0 is conventionally read as potentially undervalued, 1.0–2.0 as fairly valued, and above 2.0 as potentially overvalued relative to growth. At 0.45, Western Asset High Income Opportunity Fund Inc (HIO) screens as "Potentially Undervalued". PEG is one signal, not investment advice — see the full DCF fair value at evidinvest.com/valuation/HIO.

Western Asset High Income Opportunity Fund Inc (HIO) PEG Ratio

Q: What is Western Asset High Income Opportunity Fund Inc (HIO)'s PEG ratio?

Western Asset High Income Opportunity Fund Inc (HIO) has a PEG ratio of 0.45 (Potentially Undervalued), based on a PE ratio of 6.7 and expected EPS growth of 14.9% (5-Year EPS CAGR).

Potentially Undervalued

PE ratio relative to earnings growth — is the valuation justified?

0.45

PEG Ratio

PEG ratio is generally unreliable for Financial Services companies — earnings are driven by interest margins and provisions

PEG ratio is generally unreliable for Financial Services companies

0.45

Growth Rate Source

Good Data Quality5-Year EPS CAGR

Current Price

$3.62

TTM EPS

$0.54

P/E Ratio

6.70

Growth Rate

14.9%

5-Year EPS CAGR

Sector

Financial Services

Asset Management

Calculated

8/20/2026

2:39:54 AM

Peer Comparison

Sample Size

3 peers

Industry Median PEG

0.22

25th Percentile

0.06

75th Percentile

0.27

HIO PEG (0.45) vs Industry Median (0.22): 103% premium

Symbol	Company	PEG	P/E	Growth	vs HIO
HIX	Western Asset High Income Fund II Inc	0.06	3.4	54.5%	-86%
IGA	Voya Global Advantage and Premium Opportunity Fund	0.22	8.1	36.5%	-51%
IGD	Voya Global Equity Dividend and Premium Opportunity Fund	0.27	7.8	29.3%	-41%

How to Interpret PEG Ratio

PEG < 1.0 — Potentially Undervalued. The stock may be priced below its earnings growth rate, suggesting a potential buying opportunity.

PEG 1.0–2.0 — Fairly Valued. The stock price is roughly in line with its earnings growth. A PEG of 1.0 is often considered "fair value."

PEG > 2.0 — Potentially Overvalued. The stock may be priced above what its earnings growth justifies.

Limitations:PEG ratios are less reliable for financial firms (earnings driven by interest margins), companies with negative/zero earnings growth, and hypergrowth companies (>100% growth) where the ratio may appear misleadingly low. Always use PEG alongside other valuation metrics.

Western Asset High Income Opportunity Fund Inc (HIO) PEG Ratio

Peer Comparison

How to Interpret PEG Ratio

More on HIO

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Western Asset High Income Opportunity Fund Inc (HIO) PEG Ratio

Peer Comparison

How to Interpret PEG Ratio

More on HIO

Compare with peers

Explore