Best S&p 500 Index Fund To Invest In – This post shows the most commonly used valuation multiples, the average S&P 500 multiples by both sector and industry for fiscal years 2021 and 2020, as well as the 19- or 20-year historical averages (2002-2021 ) it shows.

The data is extracted from the quickfs.net premium plugin, which pulls from publicly available company files, and is set to ignore high and low numbers that skew the average too much, and any value above 250 or Below -250 will be removed. Due to the different months for fiscal year reporting schedules with all companies, each year’s figures may not fully reflect the actual fiscal year displayed. All values ​​represent current S&P 500 constituents and do not include previous companies that have been removed from the index.

Best S&p 500 Index Fund To Invest In

Best S&p 500 Index Fund To Invest In

The average P/E ratio for the energy sector in 2021 was 10.9, which is at the bottom of its historical average (in terms of average), likely due to the huge flow of earnings for those businesses as demand rebounds from the global pandemic. . For oil and gas

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The average P/E ratio for technology stocks (IT sector) of 42.4 in 2021 continues to outperform other sectors, with only the real estate sector seeing a higher average P/E in 2021 at 56.4. Tech stocks’ P/Es are led by names like Autodesk, Fiserv, Microchip, Paycom Software, salesforce.com, and Tyler Technologies.

The average P/E ratio of 16.8 for the financial sector in 2021 was in line with its results in 2020, showing a much lower P/E compared to the S&P average (29.0). A lower average P/E for financial stocks could be because investors perceive less growth going forward, or the industry could simply be out of favor.

The following tables show the historical average P/E ratio for the S&P 500 by sector over the past 20 years, from fiscal years 2003-2021:

The median P/E is arguably a better measure of the overall index because it takes the midpoint of the group, which roughly indicates where the P/E for each company is statistically closest.

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Again, this data is extracted from the quickfs.net premium plugin from publicly available company filings, adjusted to ignore high and low numbers that skew the average too much, and any higher It is removed from 250 or below -250. Due to the different months for fiscal year reporting schedules with all companies, each year’s figures may not fully reflect the actual fiscal year displayed. All values ​​represent current S&P 500 constituents and do not include previous companies that have been removed from the index.

Image link of the entire 20-year data set from fiscal years 2002 to 2021: Average P/E ratio of the S&P 500 by industry.

The data is extracted from the quickfs.net premium plugin, which pulls from publicly available company files, and is adjusted to ignore high numbers that drastically change the mean by removing values ​​above 20. Due to the different months for fiscal year reporting schedules with all companies, each year’s figures may not fully reflect the actual fiscal year displayed. All values ​​represent current S&P 500 constituents and do not include previous companies that have been removed from the index.

Best S&p 500 Index Fund To Invest In

The average P/S ratio for the energy sector in 2021 was 1.7, which was lower than 2020 values ​​and may reflect the large sell-off that stocks experienced during the pandemic’s sharp drop in demand.

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The average P/S ratio for technology stocks (IT sector) of 7.2 in 2021 outperforms other sectors, as does the price-to-earnings ratio, with only the real estate sector having a higher average P/S in 2021. 11.4 observes.

The average P/S ratio of 3.8 for the financial sector in 2021 is lower than the S&P average (4.6). This is in line with the sector’s average P/E ratio and indicates less optimism among investors overall for the stock.

Again, this data is extracted from the quickfs.net premium plugin, which pulls from publicly available company files, and is adjusted so that high numbers that skew the average too much are ignored by removing any value above 20. take Due to the different months for fiscal year reporting schedules with all companies, each year’s figures may not fully reflect the actual fiscal year displayed. All values ​​represent current S&P 500 constituents and do not include previous companies that have been removed from the index.

Image link of the entire 19-year data set from fiscal years 2003 to 2021: Average P/S ratio of the S&P 500 by industry.

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The average P/FCF ratio for the energy sector was 10.0 in 2021, up from 7.4 in 2020 and could indicate more cash flow reinvestment in future growth.

The average P/FCF ratio for technology stocks (IT sector) of 35.2 in 2021 outperforms all other sectors except Industrials, which had a higher average P/FCF ratio in 2021 at 37.0.

The average P/FCF ratio of -14.2 for the utilities sector is in line with the negative cash flow trend of these businesses, which mainly finance dividends through equity and debt issuance.

Best S&p 500 Index Fund To Invest In

Image link of the entire 20-year data set from fiscal years 2002 to 2021: S&P 500 average P/FCF ratio by industry.

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This data is extracted from the quickfs.net premium plugin, which is extracted from publicly available company files, and adjusted to ignore high and low numbers that skew the average too much, and any value above 20 or Less than -20 is removed. Due to the different months for fiscal year reporting schedules with all companies, each year’s figures may not fully reflect the actual fiscal year displayed. All values ​​represent current S&P 500 constituents and do not include previous companies that have been removed from the index.

The average P/B ratio for the energy sector in 2021 was 2.1, which was higher than 2020 values ​​and could reflect the large asset reductions that some companies had to make due to lack of demand from the pandemic.

The average P/B ratio for technology stocks (IT sector) of 8.0 in 2021 is the highest among all stocks, largely due to the higher return on capital and higher margins that many businesses in the industry are able to make. . Achieve.

The average P/B ratio of 2.5 for the financial sector in 2021 is lower than the S&P average (4.7) and is typical of these highly balance sheet-dependent businesses.

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Again, this data is extracted from the quickfs.net premium plugin from publicly available company filings, adjusted to ignore high and low numbers that skew the average too much, and any higher 20 or less is removed. Due to the different months for fiscal year reporting schedules with all companies, each year’s figures may not fully reflect the actual fiscal year displayed. All values ​​represent current S&P 500 constituents and do not include previous companies that have been removed from the index.

Image link of the entire 19-year data set from fiscal years 2003 to 2021: Average P/B ratio of the S&P 500 by industry.

The average PEG ratio for the energy sector in 2021 was -0.9 and its negative value was -0.7 in 2020. This shows that the average growth of the total shares of this sector has been negative in the last two years.

Best S&p 500 Index Fund To Invest In

The average PEG ratio for technology stocks (the IT sector) of 2.8 in 2021 is not surprisingly the highest among all S&P 500 sectors, trailing industrials, consumer staples and healthcare. This suggests that perhaps tech stocks today aren’t as overvalued as some investors say they are, because they look expensive on traditional valuation multiples that don’t factor in growth like P/E or P/B.

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The average PEG ratio of 1.6 for the financial sector in 2021 is lower than the S&P average (2.2) and could indicate a decline in value today, especially since these stocks also look cheap at traditional valuation multiples.

Image link of the entire 19-year data set from fiscal years 2003 to 2021: Average S&P 500 PEG ratio by industry.

Here’s a list of the tickers included for this post (current S&P 500 holdings, as of 4/7/2022):

MMM AOS ABT ABBV ABMD ACN ATVI ADM ADBE ADP AAP AES AF A AIG APD AKAM ALK ALB ARE ALGN ALLE LNT ALL GOOGL GOOG MO AMZN AMCR AMD AEE AAL AEP AXP AMTAA AWK AMPAMSS ABCAMPAMANPL TV ANET AIZ T ATO ADSK AZO AVB AVY BKR BLL BAC BBWI BAX BDX WRB BRK.B BBY BIO TECH BIIB BLK BK BA BKNG BWA BXP BSX BMY AVGO BR BRO BF.B CHRW CDNS CZR CPT CPB COF CAH KMX CCL CARR CTLT CAT CBOE CBRE CDW CE CNC CNP CDAY CERN CF CRL SCHW CHTR CVX CMG CB CHD CI CINF CTAS CSCO C CFG CTXS CLX CME CMS KO CTSH CL CMCSA CMA CAG COP ED STZ CEG COO CPRT GLW CTVA COST DCVA CTRAVCIS

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