Investment insights from Capital Group
Accelerating earnings growth can boost stock returns
Sources: Capital Group, FactSet, MSCI, Standard & Poor’s. Estimated annual earnings growth is represented by the mean consensus earnings per share estimates for the years ending December 2024 and December 2025, respectively, across the S&P 500 Index (US), MSCI Europe Index (Europe), MSCI Japan Index (Japan) and MSCI Emerging Markets Index (emerging markets). Estimates are as of 31 May 2024. The forward price-to-earnings ratio (P/E) is computed by dividing the price of a company’s stock by the company’s estimated annual earnings per share over the next 12 months.
Tech giants are investing heavily in data centers and other capital projects
Sources: Capital Group, FactSet, Standard & Poor’s. Big Tech’s proportion of total capex represents total capital expenditures across Alphabet, Amazon, Meta and Microsoft as a percentage of total capital expenditures across the S&P 500 Index. Data as of 30 May 2024.
Seven top non-US companies have outpaced the Magnificent Seven since 2022
Sources: Capital Group, FactSet, Morningstar. Magnificent Seven stocks were the top seven contributors to returns for 2023 in the S&P 500 Index. The Magnificent Seven non-U.S. are the top seven contributors to returns for 2023 in the MSCI EAFE Index. Cumulative returns are indexed to 100 on 1 January 2022, and shown through 31 March 2024, and are calculated on an equal-weighted basis for the seven stocks within each group. Past results are not predictive of results in future periods.
The tech sector ranks second in cash dividend payments
Sources: Capital Group, FactSet, Standard & Poor’s. As of 31 December, 2023. Past results are not predictive of results in future periods.
U.S. Equities
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Past results are not predictive of results in future periods. It is not possible to invest directly in an index, which is unmanaged. The value of investments and income from them can go down as well as up and you may lose some or all of your initial investment. This information is not intended to provide investment, tax or other advice, or to be a solicitation to buy or sell any securities.
Statements attributed to an individual represent the opinions of that individual as of the date published and do not necessarily reflect the opinions of Capital Group or its affiliates. All information is as at the date indicated unless otherwise stated. Some information may have been obtained from third parties, and as such the reliability of that information is not guaranteed.
Capital Group manages equity assets through three investment groups. These groups make investment and proxy voting decisions independently. Fixed income investment professionals provide fixed income research and investment management across the Capital organization; however, for securities with equity characteristics, they act solely on behalf of one of the three equity investment groups.