Valuation - Yardeni · PDF fileSTOCK VALUATION MODEL (SVM-1) (ratio scale) Fair-Value Price* S&P 500 Price Index

Valuation

Yardeni Research, Inc.

March 9, 2014

Dr. Edward Yardeni516-972-7683

[email protected]

Mali Quintana480-664-1333

[email protected]

Please visit our sites atwww.yardeni.comblog.yardeni.com

thinking outside the box

Table Of Contents Table Of ContentsTable Of Contents

March 9, 2014 / Valuation www.yardeni.com


P/E Ratios 1-2Growth vs Value P/Es 3Valuation: SVM-1 (Fed Model) 4-5Valuation: SVM-2 (Yardeni Model) 6Valuation: SVM-1 (S&P 400) 7Valuation: SVM-1 (S&P 600) 8Valuation: Equity Risk Premium 9Valuation: Rules of 20 10Valuation Models 11S&P 500 Forward Earnings 12S&P 500 Valuation 13S&P 500 Relative Valuation 14Relative Valuation: S&P 500 Growth vs. S&P 500 Value 15S&P 500 Sector P/Es 16-17Consumer Discretionary P/Es 18-19Consumer Staples P/Es 20Energy P/Es 21Financials P/Es 22Health Care P/Es 23Industrials P/Es 24Information Technology P/Es 25Materials P/Es 26Telecommunication Services & Utilities P/Es 27

Figure 1.

60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 160

10

20

30

40

50

60

0

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30

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50

60

2/28

P/E RATIOS FOR S&P 500 Capped at 45due to extreme values

Using 4-quarter trailing reported earnings

Using S&P 500 forward earnings*

* Price divided by 12-month forward consensus expected operating earnings per share using mid-month data. Monthly data through April 1994,weekly thereafter.

60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 160

10

20

30

40

50

60

0

10

20

30

40

50

60

Q3

US EQUITY MARKET CAPITALIZATION: NONFINANCIAL CORPORATIONS(as a ratio of NFC after-tax profits from current production*)

Capped at 50due to extreme values

NFC P/E

S&P 500 Trailing P/E**

S&P 500 Average P/E = 17.4

* Including IVA and CCadj. These two adjustments restate the historical cost basis used in profits tax accounting for inventory withdrawals and depreciation to the current cost measures used in GDP.** Using four-quarter trailing reported earnings.

60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 160

5

10

15

20

25

30

35

40

0

5

10

15

20

25

30

35

40

Q3

US EQUITY MARKET CAPITALIZATION EXCLUDING FOREIGN ISSUES

As a ratio of:__________

After-tax profits from current production* (Avg = 13.8)

Corporate Cash Flow** (Avg = 9.1)

* Including IVA and CCadj. These two adjustments restate the historical cost basis used in profits tax accounting for inventory withdrawals anddepreciation to the current cost measures used in GDP.** After-tax operating retained earnings plus tax-return-based depreciation.Source: Thomson Reuters I/B/E/S, US Department of Commerce, Bureau of Economic Analysis, Federal Reserve Board Flow of Funds Accounts,and Standard & Poor’s Corporation.

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P/E Ratios

Page 1 / March 9, 2014 / Valuation www.yardeni.com


90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 145

10

15

20

25

30

35

40

45

50

5

10

15

20

25

30

35

40

45

50

Feb

P/E RATIOS FOR S&P 500(using 12-month forward earnings*)

S&P 500

Technology

Ex Technology

* Price divided by 12-month forward consensus expected operating earnings per share using mid-month data.Source: Thomson Reuters I/B/E/S.

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Figure 2.

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 20148

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12

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28

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2/28

P/E RATIOS FOR S&P INDEXES*(weekly)

S&P 500 LargeCap

S&P 400 MidCap

S&P 600 SmallCap

* Price divided by 52-week forward consensus expected operating earnings per share.Source: Thomson Reuters I/B/E/S.

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Figure 3.

P/E Ratios



1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 20155

10

15

20

25

30

35

40

45

5

10

15

20

25

30

35

40

45

Dec

FORWARD P/E RATIO*: S&P 500 CITIGROUP GROWTH vs. VALUE

Growth

Value

* Using consensus 12-month forward earnings forecasts.Source: Thomson Reuters I/B/E/S.

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Figure 4.

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015.7

.8

.9

1.0

1.1

1.2

1.3

1.4

1.5

1.6

1.7

1.8

1.9

2.0

.7

.8

.9

1.0

1.1

1.2

1.3

1.4

1.5

1.6

1.7

1.8

1.9

2.0

Dec

FORWARD PEG RATIO*: S&P 500 CITIGROUP GROWTH vs. VALUE

Growth

Value

* Forward P/E divided by LTEG: Using 5-year forward consensus expected earnings growth.Source: Thomson Reuters I/B/E/S.

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Figure 5.

Growth vs Value P/Es



79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 181

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18

3/6

2/28

S&P 500 FORWARD EARNINGS YIELD & NOMINAL BOND YIELD

10-Year US TreasuryBond Yield

Forward Earnings Yield*

* 12-month forward consensus expected earnings divided by S&P 500 Index. Monthly through April 1994, weekly after.Source: Thomson Reuters I/B/E/S and Board of Governors of the Federal Reserve System.

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Figure 6.

79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 1875

1075

2075

3075

4075

5075607570758075

75

1075

2075

3075

4075

5075607570758075

3/7

2/28

STOCK VALUATION MODEL (SVM-1)(ratio scale)

Fair-Value Price*

S&P 500 Price Index

* 12-month forward consensus expected earnings divided by 10-year US Treasury bond yield. Monthly through April 1994, weekly after.Source: Thomson Reuters I/B/E/S and Board of Governors of the Federal Reserve System.

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Figure 7.

Valuation: SVM-1 (Fed Model)



Figure 8.

79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16-100

-80

-60

-40

-20

0

20

40

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80

100

-100

-80

-60

-40

-20

0

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40

60

80

100

2/28

STOCK VALUATION MODEL #1 (SVM-1)*(weekly, percent)

Overvalued

Undervalued

* Ratio of S&P 500 Index to its fair value (52-week forward consensus expected S&P 500 operating earnings per share divided by the 10-year US Treasury bond yield). Monthly through April 1994, weekly thereafter.

79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 1651015202530354045505560657075

51015202530354045505560657075

2/28

2/28

FORWARD P/E & BOND YIELD (SVM-1)(weekly)

Bond’s P/E=Reciprocal Of10-Year US Treasury Bond Yield

Ratio Of S&P 500 Price To Expected Earnings*

* 52-week forward consensus expected S&P 500 operating earnings per share. Monthly through March 1994, weekly thereafter.

79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 160102030405060708090100110120130

0102030405060708090

100110120130

2/27

3/6

MARKET’S ESTIMATE OF EARNINGS (SVM-1)(weekly, dollars per share)

S&P 500 Forward Earnings_____________________

Market’s Estimate*

Analysts’ Estimate**

* S&P 500 index multiplied by 10-year government bond yield. Monthly through March 1994, weekly thereafter.** 12-month forward consensus expected S&P 500 operating earnings per share. Monthly through March 1994, weekly thereafter. Source: Standard & Poor’s Corporation and Thomson Reuters I/B/E/S.

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Valuation: SVM-1 (Fed Model)



Figure 9.

85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14-100

-50

0

50

100

-100

-50

0

50

100

Feb

STOCK VALUATION MODEL #2 (SVM-2)*(percent)

Overvalued

Undervalued

* Ratio of S&P 500 index to its fair value (12-month forward consensus expected S&P 500 operating earnings per share divided by the difference between Moody’s A-rated corporate bond yield less fraction [0.10] of 5-year consensus expected earnings growth).

85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14150

2150

4150

61508150

150

2150

4150

61508150

Feb

.10

.20

.25STOCK VALUATION MODEL (SVM-2)(ratio scale)

5-year earningsgrowth weight_____________

.25

.20

.10

Actual S&P 500

Fair Value S&P 500*

* Fair value is 12-month forward consensus expected S&P 500 operating earnings per share divided by the difference between Moody’s A-rated corporate bond yield less fraction (as shown above) of 5-year consensus expected earnings growth.

85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

2/28

ADDITIONAL VARIABLES IN SVM-2

Corporate A-rated yield* less 10-year Treasury yield

0.1 times long-term consensusexpected earnings growth

*Moody’s corporate A monthly through 1987, then weekly through 2005. Beginning in 2006 S&P corporate A. Source: Moody’s Investors Service and Thomson Reuters I/B/E/S.

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Valuation: SVM-2 (Yardeni Model)



Figure 10.

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014-100

-80

-60

-40

-20

0

20

40

60

-100

-80

-60

-40

-20

0

20

40

60

2/28


Overvalued

Undervalued

* Ratio of S&P 400 Index to its fair value (52-week forward consensus expected S&P 400 operating earnings per share divided by the 10-year US Treasury bond yield).

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 201451015202530354045505560657075

51015202530354045505560657075

2/28

2/28




* 52-week forward consensus expected S&P 400 operating earnings per share.

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 20140

10

20

30

40

50

60

70

80

90

0

10

20

30

40

50

60

70

80

90

2/27

3/7



Market’s Estimate*Analysts’ Estimate**

* S&P 400 index multiplied by 10-year government bond yield.** 52-week forward consensus expected S&P 400 operating earnings per share. Source: Standard & Poor’s Corporation and Thomson Reuters I/B/E/S.

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Valuation: SVM-1 (S&P 400)



Figure 11.

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014-100

-80

-60

-40

-20

0

20

40

60

-100

-80

-60

-40

-20

0

20

40

60

2/28


Overvalued

Undervalued

* Ratio of S&P 600 Index to its fair value (52-week forward consensus expected S&P 600 operating earnings per share divided by the 10-year US Treasury bond yield).

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014510152025303540455055606570

510152025303540455055606570

2/28

2/28




* 52-week forward consensus expected S&P 600 operating earnings per share.

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 20140

5

10

15

20

25

30

35

40

0

5

10

15

20

25

30

35

40

2/27

3/7



Market’s Estimate*

Analysts’ Estimate**

* S&P 600 index multiplied by 10-year government bond yield.** 52-week forward consensus expected S&P 600 operating earnings per share. Source: Standard & Poor’s Corporation and Thomson Reuters I/B/E/S.

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Valuation: SVM-1 (S&P 600)



79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18-2

0

2

4

6

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18

-2

0

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2/28

Feb

S&P 500 EARNINGS YIELD & REAL BOND YIELD

10-year US Treasury Bond Yield MinusAverage Expected CPI Inflation RateFor Next 10 Years (Phili Fed Survey)*

S&P 500 ExpectedEarnings To Price Ratio**

10-Year TIPS Yield***(weekly)

* Data from 1979 to 1991 quarterly, monthly thereafter.** Earnings-price ratio is based on the Thomson Reuters I/B/E/S consensus estimates of earnings over the coming 12 months.

*** Yields on Treasury inflation protected securities (TIPS) adjused to constant maturities.Source: Board of Governors of the Federal Reserve System, US Treasury, Thomson Reuters I/B/E/S, and Federal Reserve Bank of Philadelphia.

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Figure 12.

79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18-1

0

1

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-1

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1

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13

Q4

S&P 500 EARNINGS YIELD MINUS REAL BOND YIELD*

* S&P 500 forward expected earnings to price ratio minus 10-year Treasury bond yield minus average expected CPI inflation rate for next 10 years(Phili Fed Survey).Source: Board of Governors of the Federal Reserve System, US Treasury, Thomson Reuters I/B/E/S, and Federal Reserve Bank of Philadelphia.

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Figure 13.

Valuation: Equity Risk Premium



65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07 09 11 13 15 172

4

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S&P 500 Price toExpected Earnings Ratio*

(blue line)

20 Minus 10-Year US TreasuryBond Yield(red line)

RULE OF 20: FORWARD P/E VS BOND YIELD

2/28

2/28

* Using four-quarter trailing reported earnings per share from 1965 to September 1978. Then 12-month forward consensus expected S&P 500 operatingearnings per share from October 1978 through March 1994, weekly after.Note: Shaded areas are periods when S&P 500 fell 15% or more.Source: Thomson Reuters I/B/E/S and Board of Governors of the Federal Reserve System.

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Figure 14.

85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 1510

15

20

25

30

10

15

20

25

30

Jan

S&P 500 FORWARD P/E PLUS CONSUMER PRICE INDEX (yearly percent change)

StocksOvervalued

StocksUndervalued

Source: Thomson Reuters I/B/E/S and US Department of Labor, Bureau of Labor Statistics.

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Figure 15.

Valuation: Rules of 20



5

10

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20

25

5

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25

Feb

85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14.6

.8

1.0

1.2

1.4

1.6

1.8

.6

.8

1.0

1.2

1.4

1.6

1.8

Feb

S&P 500 INDEX

P/E*

LTEG**

PEG***

* P/E = price-to-earnings ratio using mid-month price and 12-month forward consensus earnings expectations.** LTEG = consensus median 5-year expected earnings growth.

*** PEG = P/E divided by LTEG.Source: Thomson Reuters I/B/E/S.

yardeni.com

Figure 16.

52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18.0

.5

1.0

1.5

2.0

2.5

.0

.5

1.0

1.5

2.0

2.5

Q4

Q4

TOBIN’S Q FOR NONFINANCIAL CORPORATIONS*(ratio)

Actual Q

Adjusted Q**

* Ratio of market value of equities to net worth at market value, which includes real estate (including structures) at market value and equipment,software, and inventories at replacement cost.

Source: Federal Reserve Board Flow of Funds Accounts.** Actual divided by average since 1952.

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Figure 17.

Valuation Models



Figure 18.

2006 2007 2008 2009 2010 2011 2012 2013 2014 20155

15

25

3545

2/2713 1415CONSUMER DISCRETIONARY

(S&P 500 forward earningsby sector)

Annual consensusestimatesForward earnings

2006 2007 2008 2009 2010 2011 2012 2013 2014 201513

18

23

28

33

2/271314 15INDUSTRIALS

2006 2007 2008 2009 2010 2011 2012 2013 2014 201512

16

20

24

28

32

2/2713 1415CONSUMER STAPLES

2006 2007 2008 2009 2010 2011 2012 2013 2014 201515

25

35

45

55

2/271314 15

INFORMATION TECHNOLOGY

2006 2007 2008 2009 2010 2011 2012 2013 2014 201520

30

40

50

6070

2/27

1314 15

ENERGY

2006 2007 2008 2009 2010 2011 2012 2013 2014 20156

11

16

21

26

2/27

13 14 15MATERIALS

2006 2007 2008 2009 2010 2011 2012 2013 2014 20158

18

28

384858

2/2713 1415

FINANCIALS

2006 2007 2008 2009 2010 2011 2012 2013 2014 20156

8

10

12

14

2/27

1314

15TELECOMMUNICATIONS SERVICES

2006 2007 2008 2009 2010 2011 2012 2013 2014 201520

25

30

35

40

4550

2/271314

15HEALTH CARE

Source: Thomson Reuters I/B/E/S.

2006 2007 2008 2009 2010 2011 2012 2013 2014 201511

12

13

14

15

152/2713 14

UTILITIES

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S&P 500 Forward Earnings



Figure 19.

2006 2007 2008 2009 2010 2011 2012 2013 2014 201510

15

20

25

30

35

2/27

CONSUMER DISCRETIONARY(S&P 500 forward P/Es by sector)

2006 2007 2008 2009 2010 2011 2012 2013 2014 20158

11

14

17

20

2/27

INDUSTRIALS

2006 2007 2008 2009 2010 2011 2012 2013 2014 201510

12

14

16

18

20

2/27

CONSUMER STAPLES

2006 2007 2008 2009 2010 2011 2012 2013 2014 20158

10

12

14

16

18

20

22

24

2/27


2006 2007 2008 2009 2010 2011 2012 2013 2014 20154

6

8

10

12

14

16

2/27

ENERGY

2006 2007 2008 2009 2010 2011 2012 2013 2014 20158

10

12

14

16

18

20

22

24

2/27

MATERIALS

2006 2007 2008 2009 2010 2011 2012 2013 2014 20156

8

10

12

14

16

18

20

2/27

FINANCIALS

2006 2007 2008 2009 2010 2011 2012 2013 2014 20158

10

12

14

16

18

20

22

2/27

TELECOMMUNICATION SERVICES

2006 2007 2008 2009 2010 2011 2012 2013 2014 20158

10

12

14

16

18

20

2/27

HEALTH CARE


2006 2007 2008 2009 2010 2011 2012 2013 2014 20158

10

12

14

16

18

20

2/27

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UTILITIES

S&P 500 Valuation



Figure 20.

2006 2007 2008 2009 2010 2011 2012 2013 2014 20151.0

1.5

2.0

2.5

2/27

CONSUMER DISCRETIONARY(S&P 500 relative forward P/Es by sector)

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015.6

.8

1.0

1.2

1.4

2/27

INDUSTRIALS

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015.8

1.0

1.2

1.4

1.6

2/27

CONSUMER STAPLES

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015.8

1.0

1.2

1.4

1.6

2/27


2006 2007 2008 2009 2010 2011 2012 2013 2014 2015.5

.6

.7

.8

.9

1.0

1.1

2/27

ENERGY

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015.75

1.00

1.25

1.50

1.75

2/27

MATERIALS

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015.6

.8

1.0

1.2

1.4

2/27

FINANCIALS

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015.75

1.00

1.25

1.50

1.75

2/27

TELECOMMUNICATION SERVICES

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015.6

.8

1.0

1.2

1.4

2/27

HEALTH CARE

* Sector’s forward P/E divided by S&P 500 forward P/E. Source: Thomson Reuters I/B/E/S.

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015.7

.8

.9

1.0

1.1

1.2

1.3

2/27

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UTILITIES

S&P 500 Relative Valuation



2004 2005 2006 2007 2008 2009 2010 2011 2012 2013.80

.85

.90

.95

1.00

1.05

1.10

1.15

.80

.85

.90

.95

1.00

1.05

1.10

1.15

Overvalued

Undervalued

Dec

RELATIVE VALUATION OF S&P 500 GROWTH(ratio)

Normalized Relative P/E*

Average**

+1/-1 Std. Dev**

* Normalized Relative P/E is relative P/E divided by the prior 36 month average of the relative P/E. Relative P/E is P/E divided by P/E of S&P 500.** The average and standard deviation is based on the monthly Normalized Relative P/E values spread over the last 10 fiscal years.


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Figure 21.

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013.90

.95

1.00

1.05

1.10

1.15

.90

.95

1.00

1.05

1.10

1.15

Overvalued

Undervalued

Dec

RELATIVE VALUATION OF S&P 500 VALUE(ratio)

Normalized Relative P/E*

Average**

+1/-1 Std. Dev**

* Normalized Relative P/E is relative P/E divided by the prior 36 month average of the relative P/E. Relative P/E is P/E divided by P/E of S&P 500.** The average and standard deviation is based on the monthly Normalized Relative P/E values spread over the last 10 fiscal years.


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Figure 22.

Relative Valuation: S&P 500 Growth vs. S&P 500 Value



1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 20165

10

15

20

25

30

35

5

10

15

20

25

30

35

2/27

S&P 500 FORWARD P/E RATIOS*

S&P 500 Index (15.2)

Consumer Staples (16.7)

Financials (12.9)

Health Care (17.1)

* Price divided by 12-month forward consensus expected operating earnings per share.Source: Thomson Reuters I/B/E/S.

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Figure 23.

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 20165

10

15

20

25

30

35

40

45

50

55

5

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45

50

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2/27


S&P 500 Index (15.2)

Consumer Discretionary (17.9)

Information Technology (14.8)


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Figure 24.

S&P 500 Sector P/Es



1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 20165

10

15

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25

30

35

5

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30

35

2/27


S&P 500 Index (15.2)

Energy (13.1)

Industrials (16.1)

Materials (16.3)


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Figure 25.

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 20165

10

15

20

25

30

5

10

15

20

25

30

2/27


S&P 500 Index (15.2)

Telecommunication Services (13.2)

Utilities (15.4)


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Figure 26.

S&P 500 Sector P/Es



1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 20165

10

15

20

25

30

35

40

45

5

10

15

20

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35

40

45

2/27

S&P 500 FORWARD P/E RATIOS* CONSUMER DISCRETIONARY

Consumer Discretionary Sector (17.9)

Advertising (17.5)

Auto Parts & Equipment (14.4)

Automobile Manufacturers (9.7)

Publishing (19.0)

* Price divided by 12-month forward consensus expected operating earnings per share.P/E capped at 7 and 35 for all industries.Source: Thomson Reuters I/B/E/S.

yardeni.com

Figure 27.

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 20165

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S&P FORWARD P/E RATIOS:* CONSUMER DISCRETIONARY


Casinos & Gaming (23.1)

Hotels, Resorts & Cruise Lines (21.4)

Movies & Entertainment (17.4)

Restaurants (19.4)

* Price divided by 12-month forward consensus expected operating earnings per share.P/E capped at 40 for all industries.Source: Thomson Reuters I/B/E/S.

yardeni.com

Figure 28.

Consumer Discretionary P/Es



1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 20165

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S&P FORWARD P/E RATIOS:* CONSUMER DISCRETIONARY


Apparel, Accessories, & Luxury Goods (18.1)

Apparel Retail (17.0)

Footwear (23.0)

Leisure Products (14.5)


yardeni.com

Figure 29.

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 20160

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S&P 500 FORWARD P/E RATIOS:* CONSUMER DISCRETIONARY


Computer & Electronics Retailers (10.6)

Home Improvement Retailers (18.1)

Homebuilding (15.3)

Household Appliances (11.2)


yardeni.com

Figure 30.

Consumer Discretionary P/Es



1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 20165

10

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2/27

S&P 500 FORWARD P/E RATIOS:* CONSUMER STAPLES

Consumer Staples Sector (16.7)

Household Products (17.8)

Packaged Foods & Meats (17.4)

Personal Products (18.9)


yardeni.com

Figure 31.

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 20165

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S&P 500 FORWARD P/E RATIOS:* CONSUMER STAPLES

Consumer Staples Sector (16.7)

Brewers (13.7)

Drug Retail (16.5)

Soft Drinks (17.4)

Tobacco (14.5)


yardeni.com

Figure 32.

Consumer Staples P/Es



1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 20165

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2/27

S&P 500 FORWARD P/E RATIOS:* ENERGY

Energy Sector (13.1)

Integrated Oil & Gas (11.9)

Oil & Gas Refining & Marketing (9.5)


yardeni.com

Figure 33.

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 20160

5

10

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2/27

S&P 500 FORWARD P/E RATIOS:* ENERGY

Energy Sector (13.1)

Oil & Gas Drilling (9.7)

Oil & Gas Equipment & Services (14.4)

Oil & Gas Exploration & Production (15.1)


yardeni.com

Figure 34.

Energy P/Es



1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 20164

6

8

10

12

14

16

18

20

22

4

6

8

10

12

14

16

18

20

22

2/27

S&P 500 FORWARD P/E RATIOS:* FINANCIALS

Financials Sector (12.9)

Asset Management & Custody Banks (14.1)

Diversified Banks (11.7)

Investment Banking & Brokerage (12.5)

Other Diversified Financial Services (10.0)

Regional Banks (12.2)

* Price divided by 12-month forward consensus expected operating earnings per share.P/E capped at 20 for all industries.Source: Thomson Reuters I/B/E/S.

yardeni.com

Figure 35.

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 20160

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S&P 500 FORWARD P/E RATIOS:* FINANCIALS

Financials Sector (12.9)

Insurance Brokers (16.3)

Life & Health Insurance (9.3)

Multi-Line Insurance (10.6)

Property & Casualty Insurance (11.0)


yardeni.com

Figure 36.

Financials P/Es



1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 20160

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70

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S&P 500 FORWARD P/E RATIOS:* HEALTH CARE

Health Care (17.1)

Biotechnology (22.8)

Health Care Equipment (16.5)

Managed Health Care (12.0)


yardeni.com

Figure 37.

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 20165

10

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S&P 500 FORWARD P/E RATIOS:* HEALTH CARE

Health Care (17.1)

Health Care Distributors (16.8)

Health Care Facilities (23.3)

Pharmaceuticals (16.7)


yardeni.com

Figure 38.

Health Care P/Es



1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 20165

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S&P 500 FORWARD P/E RATIOS:* INDUSTRIALSIndustrials Sector (16.1)

Construction & Farm Machinery & Heavy Trucks (14.3)

Industrial Conglomerates (15.7)

Industrial Machinery (17.8)


yardeni.com

Figure 39.

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 20165

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S&P 500 FORWARD P/E RATIOS:* INDUSTRIALSIndustrials Sector (16.1)

Aerospace & Defense (15.8)

Electrical Components & Equipment (17.1)

Environmental & Facilities Services (18.7)

* Price divided by 12-month forward consensus expected operating earnings per share using mid-month data.Source: Thomson Reuters I/B/E/S.

yardeni.com

Figure 40.

Industrials P/Es



1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 20165

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S&P 500 FORWARD P/E RATIOS:* INFORMATION TECHNOLOGYInformation Technology Sector (14.8)

Application Software (38.6)

Data Processing & Outsourcing (20.4)

IT Consulting & Other Services (11.8)

Systems Software (13.0)


yardeni.com

Figure 41.

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 20165

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2/27

S&P 500 FORWARD P/E RATIOS:* INFORMATION TECHNOLOGY

Information Technology Sector (14.8)

Communications Equipment (12.7)

Computer Hardware (11.1)

Computer Storage & Peripherals (12.1)

Semiconductor Equipment (14.5)

Semiconductors (15.0)


yardeni.com

Figure 42.

Information Technology P/Es



1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 20160

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S&P 500 FORWARD P/E RATIOS:* MATERIALS

Materials Sector (16.3)

Aluminum (29.4)

Paper Products (12.6)

Steel (17.4)


yardeni.com

Figure 43.

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 20165

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S&P 500 FORWARD P/E RATIOS:* MATERIALS

Materials Sector (16.3)

Diversified Chemicals (14.8)

Industrial Gases (19.3)

Specialty Chemicals (21.4)


yardeni.com

Figure 44.

Materials P/Es



1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 20165

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S&P 500 FORWARD P/E RATIOS:* TELECOMMUNICATION SERVICES

Telecommunication Services Sector (13.2)

Integrated Telecommunication Services (12.5)


yardeni.com

Figure 45.

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 20165

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S&P 500 FORWARD P/E RATIOS:* UTILITIES

Utilities Sector (15.4)

Electric Utilities (14.7)

Gas Utilities (15.8)


yardeni.com

Figure 46.

Telecommunication Services & Utilities P/Es



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Valuation - Yardeni · PDF fileSTOCK VALUATION MODEL (SVM-1) (ratio scale) Fair-Value Price* S&P 500 Price Index