S&P 500 Trailing P/E

## What this measures

How much investors are paying for each dollar U.S. large companies already earn: the combined market value of the S&P 500 divided by the companies' combined net income over the last four reported quarters, as known on each day.

## Why it matters

Price-to-earnings is the most common test of whether stocks are expensive. This version is built only from public filings and prices, so every input can be checked. It is also the yardstick the sector P/E premiums are measured against.

## How to read it

A reading of 25 means the index is valued at 25 times a year of its profits. Companies with losses count, as they do in published index P/E ratios. Read beside the S&P 100 trailing P/E (equities.sp100.trailing_pe), the largest companies alone.

## 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.