US equities are not more expensive than European equities

US equities are more expensive than their European counterparts – this is a common opinion. We show that although there are valuation differences, they are indeed well-founded.

Indeed with a price-to-book ratio of 5.4, the shares of the S&P 500 are valued higher than shares of the European STOXX 600, which have a ratio of only 3.6. The price-to-earnings ratio of US companies is also 2.7 points higher at 19.8 compared to 17.1 for the Europeans. Where do the differences come from? Are investors really willing to pay a higher price for US shares than for European ones?

Please note: this study is only available in German.

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