Ranked: P/E Ratios in Emerging vs. Developed Markets
Key Takeaways
- Emerging market stocks trade at P/E ratios over 30% lower than developed markets, and more than 40% lower than U.S. equities.
- Singaporean stocks have the lowest price-to-earnings (P/E) ratio: 15.3.
- New Zealand stocks have the highest P/E ratio: 101.4
Emerging Markets (EMs) often offer attractive stock valuations, with lower price-to-earning ratios (P/E ratios) that may still deliver strong returns for investors.
In this graphic, the third and final in the EMs Series, Visual Capitalist has partnered with Global X ETFs to explore the P/E ratios of Emerging and Developed Markets.
P/E Ratios
The P/E ratio is among investors’ most common metrics for evaluating investment viability. These ratios compare a company’s current stock price to its earnings per share.
Below is a ranking of 10 markets by their P/E ratio, provided by MSCI:
| Rank | Country/Region | P/E Ratio |
|---|---|---|
| 1 | Singapore | 15.3 |
| 2 | Europe & UK | 15.9 |
| 3 | Emerging Markets ex China | 15.9 |
| 4 | Japan | 16.2 |
| 5 | Hong Kong | 16.2 |
| 6 | Canada | 20.2 |
| 7 | Australia | 20.2 |
| 8 | Developed Markets | 23.2 |
| 9 | U.S. | 27.5 |
| 10 | New Zealand | 101.4 |
Essentially, it shows how much investors will pay for each dollar of a company’s earnings. Investors can also extrapolate this ratio to gain the P/E ratios of all companies in a country.
Undervalued Emerging Markets
Trailing P/E ratios can help investors assess if stocks or indexes are overvalued (higher P/E) or undervalued (lower P/E).
Singapore, for example, has the lowest P/E ratio, 15.3, which means that Singaporean companies are likely undervalued compared to their earnings. New Zealand, on the other hand, has the highest P/E ratio, over three times greater than the U.S. P/E ratio–101.4.*
*as of 06/30/2025
EM (excluding China) stocks are generally undervalued compared to their earnings, with their stock prices being around 30% cheaper than their contemporaries in Developed Markets and 40% cheaper than U.S. stocks.
Unlocking Frontier Opportunities
EMs offer attractive valuations compared to their Developed Market counterparts, potentially presenting a compelling opportunity for investors.
Are you interested in exploring the dynamic Emerging Markets landscape?
The Global X Emerging Markets ex-China ETF (EMM) seeks to invest in companies, excluding those in China, that can achieve or maintain a dominant position within their respective markets.