Median

The middle value of a set once it is sorted, or the average of the two middle values when the count is even. Half the observations lie above it and half below.

Five peer companies on price-to-earnings multiples of 12, 14, 15, 18 and 60 have a median of 15 and a mean of 23.8. One company at 60, perhaps on depressed earnings, drags the mean far above anything typical of the group, while the median stays at a level most of the peers actually trade near.

So comparable-company analysis usually quotes the median, and median household income says more about a typical household than the average does. Still, the mean is the right figure when the total matters, such as the average return needed to compute what a portfolio earned.

Use the median for the typical case and the mean for the total.