Buying Low Thwarted by Narrowest Stock Valuation Gap Ever

Cheap is converging with expensive in the American equity market, narrowing options for investors looking for bargains after the broadest rally on record lifted almost 90 percent of the Standard & Poor’s 500 Index this year.

The difference in valuations shrank to the smallest since at least 1990 after companies from Hormel Foods Corp. to CenterPoint Energy Inc. rose to levels that match those with twice the profit growth, such as Ralph Lauren Corp. and Citrix Systems Inc. A measure of the dispersion of price-earnings ratios in the S&P 500 compiled by Goldman Sachs Group Inc. narrowed to 41 percent in June, the lowest on record, and held around that level since.