What is the difference between a sector, industry and peer group?

A sector is the second level grouping of the Morningstar classification system.

An industry is the bottom level grouping of the Morningstar system. There are 148 industry groups.

A peer group is a group of similarly sized companies within a single industry group. The size groupings follow BetterInvesting's recommendations for size breakdown: a Small company has annual sales of less than 1 Billion dollars, a Medium company has annual sales greater than or equal to 1 Billion dollars and less than 10 Billion dollars, a Large company has annual sales greater or equal to 10 Billion dollars.

The top 3 peers are determined by calculating the 10 year earnings per share (EPS) growth rate for each company within the peer group. The companies are then ranked in descending order by EPS growth rate. We display the top 3 companies in the peer group with the highest EPS growth rates. This set of companies is then shown on every page in order to provide a consistent set of comparison companies.

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