Earnings across the 10 major S&P 500 sectors were up an average $1.35 per share over the trailing 12-month period ended May 16 as compared to the same period a year ago.
Financials and health care led the group with increases of $5.06 and $4.19, respectively. Energy stocks stepped back further in the most recent period as earnings declined $3.93 as fuel prices dipped in March. Telecom earnings were also lower, but to a marginal degree. Performance of the sector indexes was up an average 10.8% in the past 12 months with only the telecom sector in the red. Energy sector returns were flat, while information technology and financials led the sector group with returns of 31.1% and 23.4%, respectively.
Price-to-earnings ratios were above their 24-month averages for all sectors, save health care and telecom, suggesting potential overvaluation in those sectors. The energy sector saw the most dramatic swing in its PE ratio during the first quarter of 2017 as falling oil prices brought its valuations down from its post-election rally.