Historical P/E ratios of small-cap vs. large-cap stocks?
According to the Wall Street Journal Website, average trailing 12-month P/E ratios on the major large-cap indices are currently (late September, 2011) around 12-14, which is slightly cheap compared to the very long-term historical record and very cheap compared to recent history.
However, the Russell 2000's average P/E is about 40. There seems to be tons of data on the typical historical P/E ratios for large cap indices, but not so much on small cap indices like the Russell 2000.
Is this huge difference in P/E between the large cap indices and the Russell 2000 historically typical – since small-caps are generally faster-growing companies – or is it unusual?
(1)1 Comments
Sorted by latest first Latest Oldest Best
There is most likely an error in the WSJ's data. Yahoo! Finance reports the P/E on the Russell 2000 to be 15 as of 8/31/11 and S&P 500 P/E to be 13 (about the same as WSJ).
Good catch, though! E-mail WSJ, perhaps they will be grateful.
Terms of Use Privacy policy Contact About Cancellation policy © freshhoot.com2025 All Rights reserved.