The market pullback during a relatively strong earnings season for bottom line numbers has caused P/E ratios to contract recently. Ā Below we highlight one-year P/E ratio charts (trailing 12-month) for the S&P 500 and its ten sectors. Ā As shown, the S&P 500's current P/E stands at 13.92.
We've really seen a pullback in P/Es for three defensive sectors lately -- Consumer Staples, Telecom and Utilities. Ā This summer we noted the big increase in valuations for the Utilities sector as investors plowed into dividend paying stocks. Ā But with an increase in dividend taxes on the horizon, we're starting to see an exodus out of the inflated higher yielding names, and it's bringing P/E ratios down with it. Ā Even with the drop, however, the Utilities sector still has a higher P/E than the Technology sector, which is having its own problems lately.
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