S&P 500 Defensives Valuation Premium to the Index

## What this measures

How much more (or less) investors pay for a dollar of earnings from the S&P 500's defensive sectors (Consumer Staples, Utilities, Health Care) than for the index as a whole: the group's trailing P/E divided by the S&P 500's, minus one, in percent.

## Why it matters

Defensives trade at a premium when investors want safety and at a discount when they chase growth. A deep discount says the market is not pricing much risk of a downturn.

## How to read it

Negative means defensives are cheaper than the index. Read it beside the tech premium (equities.sp500.tech_relative_pe).

## What it does not say

It is not a forward P/E: analysts' estimates of next year's earnings are licensed data Palanor does not carry. Earnings are reported GAAP net income, so one-off gains and charges move it. It uses today's S&P 500 members, today's sector of each company and current share counts back in time, so earlier years leave out companies that have since left the index. A day is published only when at least 90% of the companies in each group have both a price and a full year of reported earnings, which is when the history starts.

## Source

Net income from company filings with the SEC (XBRL, public domain). Share prices received through a licensed market data provider. Sectors from the public S&P 500 constituent list (GICS sectors). Ratio computed by Palanor.