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S&P500 PE Ratio & CAPE History
Historical S&P500 Price to Earnings Ratio with Charts
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Historical Price to Earnings Ratio of Standard and Poor's 500 Index
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March 4, 2015:  Currently, the PE ratio for the S&P500 using GAAP earnings of $100.23 for the past 12 months is 20.03 according to the February 27, 2015 update at McGraw Hill.  Using "operating earnings" of $112.92 for the past 12 months, the PE Ratio for the S&P500 is 18.23.   Data Summary:
  • Date of last earnings estimate: 2/27/15
  • S&P500:  2104.50
  • Trailing 12-month GAAP (Generally Accepted Accounting Principles) earnings = $102.77
  • PE Ratio = 20.48 using GAAP earnings of $102.77 and S&P500 at 2104.50.
  • Trailing 12-month Operating earnings= $112.92
  • PE Ratio = 18.64 using $112.92 operating earnings and S&P500 at 2104.50.
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Summary of Data (click to view full size)
S&P500 Earnings Estimates

Over the past 114 years, the rage for the price to earnings ratio (PE ratio) of the S&P500 is 5 to 150. Click to see Today's PE vs Time Chart from Chart of the Day.

Excerpt and graph from my March 2015 Newsletter:

The markets are smarter than simple models as it looks at alternative investments and says the market is worth exactly what it is today.   Multiply the 2016 operating earnings estimate of $136.52 by today’s 2014 operating PE of 18.0 and we get a target of $2,457, a 16% gain for about 8% a year.  Add in 2% dividends and we get an expected return of roughly 10% a year for the next two years.  The market will not support the current PE when the Fed raises rates, but the higher rates should come with higher economic growth and corporate profits so we could still get 10% a year going forward if the Fed raises rates that match future earnings growth, a very tough task. 


Jeremy Siegel, author of “Stock for the Long Run” on my "Recommended Reading List" says that Robert Shiller’s CAPE model below is flawed due to exceptionally low earnings during the 2008/9 recession. I think it makes sense just as using models for “average bond returns” are flawed due to an exceptionally long bull market in bonds.

P/E10, or CAPE (Cyclically Adjusted Price Earnings) Ratio
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Historical Shiller CAPE (Cyclically Adjusted Price Earnings) Ratio             Earnings) ratio

The S&P500 came very close to having zero earnings at the peak of the financial crisis.   When you divide stock price by nearly zero earnings, you get a very, very high PE.

From Chartoftheday.com1
Today's chart illustrates the price to earnings ratio (PE ratio) from 1900 to present. Generally speaking, when the PE ratio is high, stocks are considered to be expensive. When the PE ratio is low, stocks are considered to be inexpensive. From 1900 into the mid-1990s, the PE ratio tended to peak in the low to mid-20s (red line) and trough somewhere around seven (green line). The price investors were willing to pay for a dollar of earnings increased during the dot-com boom (late 1990s), surged even higher during the dot-com bust (early 2000s), and spiked to extraordinary levels during the financial crisis (late 2000s). Since the early 2000s, the PE ratio has been trending lower with the very significant but relatively brief exception that was the financial crisis. More recently, the PE ratio has trended higher (to around the 18 to 20 level). However, over the past two years, corporate earnings have increased enough to maintain a relatively flat PE ratio even in the face of rising stock prices -- an overall positive for the stock market.

S&P500 Inflation Adjusted                            Earnings

Note 1.  Source: Chart of the Day  "Journalists and bloggers may post the above free Chart of the Day on their website as long as the chart is unedited and full credit is given with a live link to Chart of the Day at"
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