Stock Market Valuation (Shiller-CAPE, PE...)

Global Stock Market Valuation Ratios

Over the past 100 years, equity investors have managed to generate real capital growth of about 7 percent annually. No other form of investment - whether bonds, cash, gold or real estate - offers comparable return potential.

But does it still pay to invest in equities at this point in time, and what returns can investors expect in the long term? StarCapital determines the relative attractiveness of 6,500 companies from 66 countries in 13 regions and 39 sectors on a monthly basis.

Academic research has shown that undervalued equity markets have achieved higher future returns in the long run than their overvalued counterparts, which holds for different valuation measures alike. More detailed information is presented in our research paper Predicting Stock Market Returns Using the Shiller-CAPE: An Improvement Towards Traditional Value Indicators? (SSRN-version)

The following world map displays current valuation measures in different regions. You can zoom into regions by using the buttons above the map, and change the valuation measures for the selected region by using the buttons below the map. Which future performances may investors expect? CAPE-based long-term performance forecast are presented here.

Global Overview of Fundamental Valuation Ratios as of

Several fundamental valuation indicators like the cyclically adjusted Shiller-PE or Price-To-Book-Ratio are presented in the following table. The published information does not constitute investment advice or recommendations.

Control the sliders to filter the table according to your preferences:


Fundamental Valuation Ratios in International Equity Markets as of

The presented valuation ratios are market-capitalization-weighted. "Weight" provides the actual country weight. PE (Price-Earnings-Ratio), PC (Price-Cashflow-Ratio), PS (Price-Sales-Ratio) and DY (Dividend-Yield) are based on trailing 12 month values. PB (Price-Book-Ratio) is based on the most recent company financal statements. The rounded RS(Relative-Strength)-Indicators (following Levy) divide the current market price by the average price of the previous 26/52 weeks. To ensure comparability across countries, the RS-Indicators are calculated in EUR. The StarCapital-Score is derived from fundamental valuation and relative-strength indicators and measures the relative attractiveness of a country (blue=attractively valued, red=expensive). In the above table, empty cells represent negative or unavailable values. We exclusively examine companies for which data is supplied by at least two independent providers. Outliers are assessed qualitatively and removed where necessary. The country selection is based on the Datastream Global Equity Universe (66 countries). Only the 40 most important and most liquid countries are shown in the table, only for them StarCapital Scores are calculated. The published information does not constitute investment advice or recommendations. No responsibility is taken for the correctness of this information. Source: StarCapital, Thomson Reuters Datastream (Worldscope / IBES), corporate information et al. Note: As of April 2015, we have extended the underyling equity universe by 2,400 companies to achieve a broader market coverage. The extended equity universe also includes 800 companies from 27 new emerging markets not shown in the table above: Argentina, Bahrain, Bulgaria, Chile, Colombia, Croatia, Cyprus, Egypt, Estonia, Jordan, Kuwait, Lithuania, Luxembourg, Malta, Marocco, Nigeria, Oman, Pakistan, Peru, Qatar, Romania, Slovakia, Slovenia, Sri Lanka, United Arab Emirates and Venezuela.

Country- and Sector-Weights in our universe as of

The following chart shows the current distribution of all considered countries and 39 sectors in our universe (please refer to our information on Sector Valuation) for more information. The most attractive countries are shaded blue, less attractive countries are shaded red:

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Global weight
as of

Attractiveness:       high       neutral       low

Remarks

As the relative attractiveness of a market does not necessarily coincide with it's absolute valuation level, we calculate a fair value corridor for each market.

Based on these Fair Values computed by the historical average valuation levels, the German stock market currently trades close to its fair value whereas Southern Europe and Emerging Markets are undervalued. The US valuation is currently 41% higher than in the past.

Fair Value Germany - StarCapital - Keimling - Imkeller
StarCapital - Norbert Keimling

Contact Us

For queries or additional information please contact:


Norbert Keimling
Head of StarCapital Research
info(at)starcapital.de

The presented information is proprietary to StarCapital, and may not be copied or distributed without our prior, written permission. We do not guarantee that the information is accurate, complete or timely.