The table below shows the historical P/E (TTM), CAPE ratio, total return & dividend yield of Canada’s equity market, calculated using large cap companies listed on the Toronto Stock Exchange. The current P/E ratio of Canada’s stock market is 17.76 and CAPE ratio is 22.87 (9/30/2019).
For comprehensive data, check the Global Equity Valuations Researcher Dataset by Siblis Research.
Canada Stock Market – P/E, CAPE, Yield & Total Return
For full historical valuation data of Canadian stock market since the year 1981, 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.
How the total return is calculated?
Most stock indexes are so called price indexes that only consider share price movements. But in order to track the total return that an investor is generating, also all the dividends and other distributions need to be taken account. On the long term, dividends can provide a sizable share of the profits generated from stock market.
Rate of Return (single period) = (Initial Value + Price Return + Dividend) / Initial Value
When calculating returns for a longer period, it is important to consider whether dividends/distributions are reinvested or not. If all the distributions are invested back to the index, the effect of compounding needs to be taken account. In the long term, compound interest can make all the difference.
The annual total return calculated by Siblis Research assumes that the dividends received during a certain year are taken in cash and not immediately reinvested. During the period of one year the effect is trivial but if you are calculating long-term returns, please be sure to familiarize yourself with CAGR calculation method.
Toronto Stock Exchange (TSX)
Toronto Stock Exchange is the main stock exchange of Canada and the eight largest stock exchange in the world. The exchange is owned by the TMX Group that also operates TSX Venture Exchange, a market for emerging companies. TSX is characterized by a large number of mining and energy companies, a sign of the vast natural resource of Canada.