[7/12/06] The S&P 500 index is now trading at 14.5 estimated 2006 earnings with a forecast of 12% earnings growth in 2006. [That sounds pretty reasonable to me.]
-- Markets Are Never Wrong?, James Holloway, Vice President S&P Editorial
[4/20/05] Right now the average S&P 500 company sports a return on equity of 20%. It's priced at 19 times free cash flow and 20 times trailing 12 months' earnings. It's expected to grow those earnings at just under 13%. (And for those of you punching away at your calculators, yes, the average company is therefore selling at a PEG of more than 1.5, and so is by traditional metrics overpriced.) Finally, the average company pays a historically tiny 2% dividend.
Actually that average company sounds pretty good to me.
[updated 7/18/05] 18 times free cash flow, 19 times trailing earnings.