, Columnist
Small Companies Aren't Sharing in the Corporate Boom
Profit margins are near record levels for the S&P 500, but not for the Russell 2000.
How high can they go?
Photographer: Loic Venance/AFP/Getty Images
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For big American corporations — General Electric Co. excepted, of course — these are pretty close to the best of times. Profit margins for the Standard & Poor’s 500 Index companies are near their all-time highs. Heck, profit margins for all of corporate America are near their all-time highs:
This robust profit performance makes it hard to get all that worked up about the current valuation of U.S. stocks. The price/earnings ratio of the S&P 500 is, at 20.6 as of Monday morning, not exactly cheap by historical standards, but it’s not crazy expensive, either.