Utilities Sector‘s CAPE ratio

The CAPE ratio for the Utilities Sector evaluates stocks in industries like electricity, water, and natural gas by comparing current prices to inflation-adjusted earnings averaged over the past 10 years. This ratio smooths out earnings fluctuations, which are typically stable in utilities due to consistent demand and regulated pricing. By applying the CAPE ratio to utilities, investors can determine if the sector is overvalued or undervalued compared to historical averages. A high CAPE suggests overvaluation and potentially lower future returns, while a low CAPE indicates undervaluation and possibly higher returns, aiding long-term investment decisions in the utilities sector.