The table below presents the historical price-to-earnings (P/E) ratio (TTM), earnings per share (EPS), CAPE ratio, and dividend yield for Canada’s equity market, based on large-cap companies listed on the Toronto Stock Exchange. As of January 1, 2025, Canada’s stock market has a trailing P/E ratio of 19.36 and a CAPE ratio of 21.84.
As of early 2025, the Canadian stock market is expected to see a recovery in earnings growth, reversing the declines recorded in late 2023 and throughout 2024. After a challenging period marked by inflation and rising interest rates, analysts project a gradual rebound, driven by key sectors such as energy and materials.
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Canada Stock Market – P/E (TTM and Forward), EPS (TTM), CAPE Ratio & Yield
| Date | P/E (TTM) | EPS (TTM) * | Forward P/E | CAPE Ratio | Dividend Yield (TTM) |
|---|---|---|---|---|---|
| 12/31/2024 | 19.36 | 120.65 | 15.28 | 21.84 | 2.92% |
| 6/30/2024 | 17.36 | 118.99 | 13.82 | 19.65 | 3.14% |
| 12/31/2023 | 15.15 | 130.64 | 13.61 | 19.50 | 3.15% |
| 6/30/2023 | 13.04 | 145.92 | 12.63 | 19.39 | 3.25% |
| 12/31/2022 | 12.53 | 146.10 | 12.01 | 19.53 | 3.21% |
| 6/30/2022 | 14.50 | 122.84 | 11.50 | 19.75 | 3.23% |
| 12/31/2021 | 18.82 | 106.52 | 13.96 | 23.66 | 2.59% |
| 6/30/2021 | 21.65 | 87.98 | 15.54 | 23.07 | 2.56% |
| 12/31/2020 | 26.80 | 61.43 | 16.18 | 20.33 | 2.93% |
* The EPS (earnings per share) in the table above has been indexed to a base value of 100 as of January 1, 2020. The EPS reflects the aggregate earnings of large-cap Canadian stocks.
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Earnings Growth of the Canadian Stock Market
After a sharp decline during the COVID-19 market crash, corporate earnings in Canada rebounded swiftly, driven by strong commodity prices, and fiscal stimulus. This rapid recovery reflected the resilience of key sectors such as energy, financials, and materials.
However, by late 2023, earnings began to decline, impacted by higher interest rates, slowing economic growth, and weaker consumer demand. Rising borrowing costs and global uncertainties weighed on corporate profitability.
The downtrend continued into 2024, with earnings contracting even further. Persistent inflationary pressures, tighter monetary policy, and weaker global demand contributed to earnings deterioration, particularly in rate-sensitive sectors like real estate.
As of early 2025, the Canadian stock market is anticipated to experience a rebound in earnings growth following the declines observed in late 2023 and throughout 2024. Analysts project an average earnings growth of approximately 10% in 2025, with expectations of continued growth into 2026. The Bank of Canada’s policies are expected to remain accommodative and key sectors such as energy and materials are projected to play key roles in driving earnings growth.
However, Canada’s relatively slower economic momentum compared especially to the U.S. and uncertainties surrounding tariffs and exports can cause negative surprises.