Stock Market Valuation Indicators: Is This Time Different?

Kevin Cole, Jean Helwege and David Laster

Financial Analysts Journal, 1996, vol. 52, issue 3, 56-64

Abstract: Traditional market indicators have pointed to an overvalued stock market throughout the 1990s, because the dividend yield dropped to a record low and the market-to-book ratio reached a record high. Despite the indicators, the stock market has performed well, leading market watchers to question whether these indicators behave differently now than they have in the past. This article examines the predictive power of these measures and addresses the claim that the dividend yield and market-to-book ratio are no longer valid indicators. We find that share repurchase activity has not been especially high through most of the 1990s and that, adjusting for buybacks, the dividend yield remains low. Likewise, the market-to-book ratio remains at a record high once charges for retiree health liabilities have been taken into account.

Date: 1996
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.2469/faj.v52.n3.1996 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:ufajxx:v:52:y:1996:i:3:p:56-64

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/ufaj20

DOI: 10.2469/faj.v52.n3.1996

Access Statistics for this article

Financial Analysts Journal is currently edited by Maryann Dupes

More articles in Financial Analysts Journal from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().