Question 1

What is the P/E ratio of the S&P 500?

Accepted Answer

The S&P 500 P/E ratio is the aggregate price-to-earnings ratio calculated by dividing the total market capitalisation of all S&P 500 companies by their combined trailing-twelve-month net income. It measures how much investors are paying per dollar of earnings across the index. The historical average is roughly 15-17x.

Question 2

What is the difference between trailing P/E and forward P/E?

Accepted Answer

Trailing P/E uses earnings from the past 12 months (actual reported results). Forward P/E uses consensus analyst earnings estimates for the next 12 months. Forward P/E is typically lower because analysts expect earnings to grow. A large gap between trailing and forward suggests strong expected growth.

Question 3

What is earnings yield?

Accepted Answer

Earnings yield is the inverse of P/E (i.e., 1 / P/E). It expresses how much earnings you get per dollar invested. For example, a P/E of 25 equals a 4% earnings yield. Investors compare earnings yield to risk-free Treasury yields to gauge whether stocks offer adequate compensation over bonds.

Question 4

How is the aggregate P/E calculated?

Accepted Answer

We use the market-cap-weighted method: total market cap of all index members divided by total positive net income (TTM). Loss-making companies contribute zero to the denominator, which is the standard institutional approach used by S&P Global.

Question 5

Why are some sector P/E ratios very high?

Accepted Answer

Sectors with many growth stocks (Technology, Consumer Discretionary) or heavy depreciation (Real Estate/REITs) tend to have elevated P/E ratios. This doesn't necessarily mean overvaluation — forward P/E and EV/EBITDA often give a more balanced picture for these sectors.

Question 6

Is a high P/E ratio bad?

Accepted Answer

Not necessarily. A high P/E can reflect strong expected growth (justified by forward earnings), a low-risk industry premium, or genuine overvaluation. Compare trailing P/E with forward P/E: if forward P/E is significantly lower, earnings are expected to grow, which may justify the current premium.

Index	P/E	Fwd P/E	P/B	EV/EBITDA	Earn. Yield	Div. Yield	Median P/E	Mkt Cap	Stocks
S&P 500	31.7	23.2	5.78	20.4	3.2%	0.98%	24.9	$71.7T	502
Nasdaq 100	40.3	26.4	10.98	27.8	2.5%	0.41%	35.6	$42.4T	100
Dow 30	33.0	25.4	9.34	22.7	3.0%	0.79%	25.9	$24.0T	30
Russell 1000	35.1	14.2	3.90	23.4	2.9%	0.69%	24.2	$60.1T	992
Russell 2000	24.4	19.4	1.27	12.6	4.1%	1.55%	17.3	$3.8T	1940

Sector	P/E	Fwd P/E	EV/EBITDA	Div Yield	Weight	Stocks
Technology	46.2	28.4	32.3	0.42%	33.9%	81
Communication Services	29.4	23.7	20.2	0.46%	17.5%	23
Financial Services	18.4	15.7	15.2	1.43%	10.8%	69
Consumer Cyclical	38.2	29.4	21.5	0.60%	9.6%	52
Healthcare	27.4	18.2	16.1	1.69%	7.7%	60
Industrials	30.3	25.2	19.2	1.46%	6.7%	74
Consumer Defensive	31.3	24.8	19.0	2.08%	5.2%	37
Energy	23.1	14.3	10.4	2.57%	3.2%	23
Utilities	24.4	20.1	15.0	2.25%	2.3%	32
Real Estate	38.5	38.3	22.3	3.16%	1.7%	31
Basic Materials	33.7	18.4	15.6	1.48%	1.4%	20

#	Ticker	Company	Sector	P/E	Fwd P/E
1	CHTR	Charter Communications, Inc.	Communication Services	4.0	3.5
2	CMCSA	Comcast Corporation	Communication Services	4.6	7.1
3	CAG	Conagra Brands, Inc.	Consumer Defensive	5.7	8.1
4	ALL	The Allstate Corporation	Financial Services	5.8	7.6
5	EIX	Edison International	Utilities	6.0	11.4
6	UHS	Universal Health Services, Inc.	Healthcare	7.1	7.0
7	SYF	Synchrony Financial	Financial Services	7.8	7.8
8	HPQ	HP Inc.	Technology	8.0	7.4
9	GIS	General Mills, Inc.	Consumer Defensive	8.2	9.8
10	T	AT&T Inc.	Communication Services	8.2	10.8

#	Ticker	Company	Sector	P/E	Fwd P/E
1	VTR	Ventas, Inc.	Real Estate	164.1	133.2
2	TPR	Tapestry, Inc.	Consumer Cyclical	165.6	19.6
3	AMD	Advanced Micro Devices, Inc.	Technology	168.9	60.9
4	DOC	Healthpeak Properties, Inc.	Real Estate	196.6	90.5
5	GPC	Genuine Parts Company	Consumer Cyclical	202.1	12.3
6	PLTR	Palantir Technologies Inc.	Technology	217.7	94.6
7	IRM	Iron Mountain Incorporated	Real Estate	256.8	53.5
8	AXON	Axon Enterprise, Inc.	Industrials	263.9	51.8
9	ON	ON Semiconductor Corporation	Technology	380.0	36.0
10	TSLA	Tesla, Inc.	Consumer Cyclical	386.4	217.3

S&P 500 Valuation Dashboard

S&P 500 is above historical norms

Where Does S&P 500 Sit?

Are Earnings Growing Into the Valuation?

Stocks vs Bonds — Is It Worth the Risk?

Historical P/E — S&P 500

Earnings Yield — S&P 500

How Do Indices Compare?

Which Sectors Are Cheap vs Expensive?

Cheapest & Most Expensive in S&P 500

10 Cheapest (Lowest P/E)

10 Most Expensive (Highest P/E)

Frequently Asked Questions

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