SP&500 Sectors and current P/E Ratios

The sectors of the S&P 500 index are 11 distinct groups of companies that operate in similar industries or sectors. Each sector has its own index and represents a particular portion of the overall market based on their respective size and weight in the S&P 500 index.

The 11 sectors are: Communication Services, Consumer Discretionary, Consumer Staples, Energy, Financials, Health Care, Industrials, Information Technology, Materials, Real Estate and Utilities.

Investors can invest in specific sectors, to build a diversified portfolio. It's advaisable to check whether a sector is particularly expensive, by looking at its P/E.

Furthermore, you can check if a stock is undervalued compared to its sector, by comparing its P/E with the sector's one.

Sector with the highest P/E Ratio:
Real Estate: 32.55
Sector with the highest deviation vs 10Y Avg P/E:
Health Care: +12.48 σ
S&P 500 SECTORS P/E RATIO
Global Industry Classification Standard (GICS)
Last Update: 22 Apr 2024
Swipe left to see all data
P/E Evaluation Historical P/E Average P/E Deviation vs Avg
S&P 500 Sector Trend P/E 5 Years 10 Years 20 Years 5 Years 10 Years 20 Years 5 Years 10 Years 20 Years
Real Estate XLRE 32.55
Undervalued
Undervalued
-
40.44 38.00 -
-1.33 σ
-1.48 σ
-
22 Apr
Information Technology XLK 32.50
Overvalued
Expensive
Expensive
26.30 20.89 17.96
+1.92 σ
+2.52 σ
+3.95 σ
22 Apr
Health Care XLV 31.83
Expensive
Expensive
Expensive
19.61 19.35 17.23
+6.81 σ
+12.48 σ
+6.53 σ
22 Apr
Consumer Discretionary XLY 26.21
Fair
Overvalued
Expensive
26.81 22.18 18.74
-0.15 σ
+1.02 σ
+2.44 σ
22 Apr
Industrials XLI 25.45
Expensive
Expensive
Expensive
20.02 17.89 16.21
+2.21 σ
+3.49 σ
+5.20 σ
22 Apr
S&P 500 Index SPY 25.32
Expensive
Expensive
Expensive
19.71 17.82 15.62
+2.77 σ
+3.88 σ
+4.96 σ
22 Apr
Materials XLB 24.92
Expensive
Expensive
Expensive
17.53 16.76 15.37
+4.14 σ
+6.31 σ
+5.85 σ
22 Apr
Consumer Staples XLP 24.47
Expensive
Expensive
Expensive
20.86 19.74 17.75
+2.63 σ
+4.27 σ
+3.57 σ
22 Apr
Communication Services XLC 20.32
Fair
Overvalued
Expensive
20.18 16.38 15.50
+0.06 σ
+1.14 σ
+2.13 σ
22 Apr
Utilities XLU 18.89
Fair
Fair
Overvalued
19.18 17.86 15.92
-0.37 σ
+0.85 σ
+1.64 σ
22 Apr
Financials XLF 16.91
Expensive
Expensive
Expensive
13.47 13.38 12.55
+3.09 σ
+4.33 σ
+4.12 σ
22 Apr
Energy XLE 12.59
Fair
Fair
Fair
14.67 19.52 14.25
-0.31 σ
-0.91 σ
-0.33 σ
22 Apr
Methodology
The Average P/E (μ) and the Standard Deviation (σ) are calculated excluding 20% outliers (i.e. over a range of values excluding 10% of observations from the top and 10% from the bottom of the dataset).
A P/E between (μ - σ) and (μ + σ) is considered "Fair", over a specific timeframe.
A P/E greater than (μ + σ) is defined "Overvalued", greater than (μ + 2σ) is defined "Expensive".
A P/E less than (μ - σ) is defined "Undervalued", less than (μ - 2σ) is defined "Cheap".
The Trend is considered positive if the ETF price is higher than the 200-day moving average (SMA).
S&P 500 SECTORS - EVALUATION DIAGRAM
Long Term Trend and P/E Ratio

Sector Details

Defensive sectors are those that tend to perform well in economic downturns because they offer products or services that are necessary for everyday life. These sectors include Consumer Staples, Health Care, and Utilities.

  • Consumer Staples include products such as food, beverages, and household goods, which are necessary for daily living.
  • Health Care includes companies in the healthcare industry, which will always be necessary no matter the economic climate.
  • Utilities include companies that provide essential services such as electricity, water, and gas.

Non-defensive sectors, on the other hand, are those that tend to perform well in economic boom times. These sectors include Consumer Discretionary and Information Technology/Communication Services.

  • Consumer Discretionary includes companies that sell products that people can live without, such as luxury goods and entertainment.
  • Information Technology and Communication Services include companies that provide technology-related services and products, such as software and hardware.

The remaining sectors, Energy, Financials, Industrials, Materials and Real Estate, are not necessarily defensive or non-defensive as a whole. They can be influenced by factors such as interest rates, commodity prices, and economic growth.