With the Canadian equity market continuing to under-perform against world benchmarks (see TrendLine graph on the web site), the drive to diversify intensifies. The following table shows Canada’s performance across a fifteen year perspective at June 30,1999. The returns measure total performance (gains plus dividends) expressed in Canadian currency translation.

Region 1 year 3 years 5 years 10 years 15 years
N. A.
Canada 3.2 17.5 17.6 23.5 24.2
U.S.A. 25.6 33.7 30.8 22 20.5
Asia:
Hong Kong 73.9 7.8 9.9 23.5 24.2
Japan 31.3 -4.1 -3.6 -.1 11.1
Singapore 95.8 -5.9 1.1 10.7 n/a
Australia 21.7 9.9 10.8 12.3 14.6
Europe:
Britain 5.2 25.8 21.5 17.5 19.1
France 4.2 24.2 19.9 16.4 20.4
Finland 73.8 68.6 46.1 22 n/a
Germany -8.2 22.5 18.8 16.8 18.5
Ireland -5.1 19.5 22.3 16.4 n/a
Italy .7 25.5 15.9 10.9 17.1
Spain -1.6 33.5 27.9 16.5 23.7
Sweden 6.7 26.5 28.1 1.8 21.4

 

Stock market valuations are a hot topic these days. One measure of this, the P/E (price-to-earnings) ratio, compares a stock’s price to its earnings per share. This reflects how many years of future earnings are implicit in the price and is an index of how cheap or expensive a stock is. P/E ratios are often quoted both against trailing (historical) and leading (expected future) earnings. The accompanying chart shows these statistics at June 30, 1999 for country averages. The graph also shows the average country dividend yield, which reflects how much of a company’s earnings are distributed to shareholders as dividend income.

Region
Dividend Yield
Trailing P/E Ratio
Leading P/E Ratio
Canada
1.5
37.5
23.4
Australia
3.1
26.7
20.6
Britain
2.4
27.3
23.3
France
2.1
38.5
23.0
Germany
2.1
38.5
23.0
Hong Kong
2.4
24.2
20.2
Japan
.7
neg.
66.5
U.S. Dow
1.6
26.2
21.8