Deep Dive: This S&P 500 sector has actually gotten cheaper as the stock market trades near records

Amid the endless warnings that the stock market is heading for a fall, only one sector has resisted the trend of ever-pricier valuations relative to earnings.

This chart shows the change in price-to-earnings valuations, based on trailing earnings for 12 months, for the entire S&P 500 SPX, -0.10% over the past year, a period in which the index has returned nearly 20%, with dividends reinvested:


Here’s how the trailing price-to-earnings valuations have changed for all the sectors in the index over the past year:

S&P 500 sector Price/ trailing 12 months’ earnings – June 13 Price/ trailing 12 months’ earnings – year earlier
Consumer Discretionary 21.9 19.0
Consumer Staples 22.2 20.3
Energy 34.6 27.7
Financials 14.9 11.8
Health Care 20.9 20.3
Industrials 21.2 16.9
Information Technology 22.6 18.3
Materials 20.9 17.2
Real Estate 27.9 22.8
Telecommunications Services 17.0 13.5
Utilities 19.3 20.1
S&P 500 index 20.8 18.0
Source: FactSet

Note: For the real-estate sector, we looked at price/funds from operations, because FFO is the most commonly used measure of a real-estate investment trust’s ability to pay dividends.

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