Canada Stock Market Valuations and Expected Future Returns

Updated at Sun, 28 Aug 2016 20:30:13 -0500
Country: Canada (updated daily) check out Global Overview for detailed methodology.

Ratio of total market cap over GDP: Maximum - 190%; Minimum - 78%; current - 119%
Expected future annual return: 5.2%

ETF Used for dividend yield: EWC (Yield=1.74%)
Market Index used: TSXSP
Current Annual GDP: $1,870 billion US dollars or 2,032 in billions of national currency (GDP in Local Current Prices Annual Growth=3.61%)
Data since year 1990


Canada Historical GDP Growth

Historical GDP of Canada in billions of national currency. The GDP in local current prices has grown at the annual rate of 3.61% over the past 8 years. Please note this growth rate includes the effect of price inflation and it is NOT the real GDP growth rate. Current Annual GDP: $1,870 billion US dollars or 2,032 in billions of national currency.

Canada GDP (Billion, National Currency)

Historical Stock Market Cap

Historical total market of Canada in billions of national currency. This value is normalized using the data published by WorldBank. TSXSP is used for the normalization. Use TSXSP as index, data goes back to 2000. The index comprises about 70% of market capitalization for all Canadian-based companies listed on the TSX. Annual GDP data from IMF, back to 1990, in billions Canadian Dollar.

Canada Total Market Cap (Billion, National Currency)

Historical Ratio of Total Market Cap over GDP (%)

The current ratio of total market cap over GDP for Canada is 119%. The historical high was 190%; the historical low was 78%. If we assume that the ratio will reverse to the historical mean of 118% over the next 8 years, the contribution to expected annual return is -0.16%. This is the detailed historical chart of the ratio.

Canada Ratio of Total Market Cap over GDP (%)

Conclusion

The stock market of Canada is expected to return 5.2% a year for the coming years. This is from the contribution of economic growth in local current prices: 3.61%, Dividend Yield: 1.74% and valuation reverse to the mean -0.16%.

This is the projected return of the stock market in Canada relative to other countries. Click on each bar in the chart to go to other countries:


You can go here to see what international stocks Gurus are buying.

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