Bespoke: A look at historical U.S. sector PE ratios

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The update on U.S. sector PEs below comes courtesy of my friends at top-quality research house Bespoke.

Below we take a look at where the P/E ratios (trailing 12-month) of the S&P 500 and its ten sectors currently stand, as well as where things stood on March 9th, 2009 (bear market low) and April 29th, 2011 (bull market high). As shown, the Industrial sector has seen its multiple decline by the most since 4/29 with a drop of 4.94 points. Materials ranks second at -4.89, followed by Energy (-4.38), Financials (-3.37), and Consumer Discretionary. The S&P 500 as a whole has seen its P/E fall 3.05 points from 15.50 to 12.44. The other five sectors (Tech, H. Care, Staples, Telecom, Utilities) have seen their P/Es decline since 4/29 as well, but by a lesser amount than the S&P 500.

At the moment, the Financial sector has the lowest trailing 12-month P/E of the ten sectors at 10.62. Energy ranks 2nd lowest at 11.19, while Health Care is a close 3rd at 11.23. Telecom has the highest multiple at 17.50. Only two other sectors have P/E ratios above 13, and these are both of the consumer sectors (Cons. Discret. stands at 14.25, Cons. Staples stands at 14.91).

While valuations may seem attractive at current levels versus where they stood just a few months ago when the equity market hit its bull market peak, they’re not anywhere close to the levels seen at the March 2009 lows.

For those interested, below we provide price and P/E charts for the ten S&P 500 sectors going back to 1993. The blue line represents the price (left axis), while the grey line represents the P/E ratio (right axis). Areas where the P/E ratio disappears are times when the P/E had turned negative.

Source: Bespoke, August 19, 2011.

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