At the close of the U.S. stock market on 3/16/21, was the price-to-earnings ratio of the S&P 500 higher or lower than its average over the past century?
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At the close of the U.S. stock market on 3/16/21, the price-to-earnings ratio of the S&P 500 was 40.21, or 153% higher than its 15.91 average over the past century. The price-to-earnings ratio is a key measure of companies' values. It is equal to the costs of their stocks divided by their annual earnings. In other words, it shows how many years it would take a buyer to recoup their investment if the profits of the company don't change.
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