CAPE Ratios by Country (Global Shiller PE Ratios)

The table below lists the historical and current CAPE Ratios of the largest economies in the world. Among the largest economies, Russia currently has the lowest Shiller PE ratio while U.S. is clearly the most expensive market when measured by this ratio. However, the CAPE ratios of different nations should not be directly compared to each other. The best way to evaluate if a country’s stock market might be undervalued or overvalued is to compare the nation’s current ratio to its historical average.

For the latest data, check the Global Equity Valuations Researcher Dataset by Siblis Research that provides CAPE ratios of more than 20 nations on a monthly level for the past 20+ years.

Global CAPE Ratios by Country

Need comprehensive data? Subscribe for the Global Equity Valuations Researcher Dataset by Siblis Research that provides current and historical P/E (TTM) ratios, forward P/E ratios, CAPE ratios, dividend yields, market cap to GNI ratios, sector breakdowns and long-term interest rates of the largest economies and stock markets in the world. Check a sample dataset from here.

Using CAPE Ratio to estimate global stock market valuations

The idea behind the CAPE ratio is that company earnings tend to be volatile and cyclical fluctuations have a huge impact on the traditional P/E ratio. Instead of using annual earnings, CAPE ratio uses the average (inflation-adjusted) earnings of the last 10 years to smoothen out any regular cyclical variations.

Professor Shiller popularized the ratio when he demonstrated the clear historical relationship between the ratio and market returns when calculated for S&P 500 index. Multiple studies have shown that Shiller PE can be successfully applied also for global markets.

For additional information about using CAPE on a global scale, check the writings by Meb Faber. Mr. Faber’s blog covers practically everything you need to know about the ratio.

Global Valuations in January 2020

Based solely on the CAPE ratio, the most expensive stock markets (among the 16 largest economies measured by GDP) can be found from United States, India and France. The most undervalued nations are Poland, Russia and Turkey.

The CAPE of S&P 500 is currently (1/29/2020) 31.30, making the US stock market clearly the most expensive among the largest economies.

Before the financial crisis, the Shiller PE of Russian equity market was over twenty but has been lower than ten since 2009. A ratio this low would suggest that Russian companies are trading at a bargain but investors have stayed sceptical about Russia. However, the year 2019 was strong for the Russian stock market and the valuations of its firms have been going higher.

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