Long-term PE Ratios for Ten Big Companies

Expensive but hard to say if overvalued

Yesterday, we looked at ten big companies:

What’s great about these ten stocks is that they have over thirty years of fundamental data history to analyze. Let’s start with market capitalization:

Valuation has been explosive lately but what about earnings?

Hmm…that doesn’t look as exponential looking. So, we might expect some elevated levels on the price-to-earnings ratio:

And, that’s exactly what we see. The PE ratio is high right now and has risen quickly. But, it’s still below levels during the dot-com bubble. Could it get there? Sure.

However, it’s been an extraordinary time for the market and earnings are expected to resume some degree of normalcy going forward. That means, as long as prices don’t go too crazy, we should see the PE ratio come down a bit or at least not rise as quickly. That’s the future though - so who really knows for sure?

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