A sector PE is a PE ratio for a whole sector rather than an individual company. A market PE is the same for an entire market.
A sector or market PE is:
where market cap is the total market capitalisation of all companies in the sector or market and
profit is the total bottom line profit of all companies in the sector or market.
Sector PE is used to compare a company to its sector, a company to market as a whole or a particular sector to the market.
A market PE is a sector PE as above, where the sector is an entire market
Market PE may be used as a comparator for a company's PE. A sector PE is usually more suitable.
Market PE is also used as a measure of the value of the market as a whole. A market PE may be compared to:
historical market PEs of the same market,
returns on other types of securities or the risk free rate.
Like any valuation ratio, a higher market PE may be justified by higher growth. The growth rate of the market may be estimated by aggregating the profit forecasts of large companies, or economic growth forecasts may be used as a proxy. Another way of approaching the question of whether the market is correctly valued is provided by the cyclically adjusted PE
Overall Market P/E(excl. z,otc) 17.50
|Food & Allied
|Fuel & Power
|Pharmaceuticals & Chemicals
|Services & Real Estate
|Paper & Printing
|Travel & Leisure
|We calculate P/E excluding :
- Z category.
- Shares of OTC.
- Shares which are not traded for a long time.
|Calculation depends on the real time price and latest share outstanding.