P/E Ratio of the US Market Is Still Very High, Even Despite Others Have Better EPS Over Time

by Peter Smith

European and Asian markets offer better EPS over time, but investors sticks with the US.

Image Source: Twitter @leadlagreport

Image Source: Twitter @leadlagreport

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US Market Is Still Trade at a Premium

Apparently, investors prefer the relative stability of the US market to large potential returns from European and Asian exchanges.

According to Michael A. Gayed, US stocks trade at a premium relative to the rest of the markets, even if they offer higher earnings per share (EPS).

What Is P/E Ratio?

The analysis is carried out based on the P/E indicator. The Price-to-earnings ratio is the measurement for valuing a company. It compares the current share price with its per-share earnings. The higher the ratio, the longer the investment in the company will pay off. The indicator is suitable for comparing companies, industries, or even entire stock markets.

 

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