GDP growth vs. P/E for international ETF.

One indicator, PEG, of fundamental analysis measures P/E relative to growth (EPS growth). It is especially helpful to compare stocks, indexes. Low P/E not necessary means under valuated price. It's always needed to compare with potential growth. PEG indicator uses EPS growth as a denominator.

I made following analysis for world stock markets. Assets are regional ETF underlying international stocks. It's not problem to find P/E ratio for ETF in question but it's always difficult to find EPS respectively EPS growth data. Therefore I used expected GDP growth (2008) for world economies (based on IMF prediction). Which means as a PEG denominator is GDP growth instead of EPS growth.


International ETF - fundamental data.

As you can see the best valuation (the lowest PEG) is for China followed by India, Brazil and Russia. All emerging countries of BRIC.

Scatter chart below shows where international ETF stand in relation P/E ratio vs. GDP growth. The farest ETF from diagonal on the right side means the most under valuated. On the left we talk about over valuated.


Related tickers: (EWI), (IVV), (EWC), (EWJ), (EWG), (EWQ), (EWU), (EWP), (EWW), (EWY), (EWA), (EWZ), (EWH), (RSX), (INP), (FXI)