Aleph Blog out­lines why he believes "behe­moth" com­pa­nies (i.e. firms with a mar­ket value greater than $100 bil­lion) trade at rel­a­tively com­pressed price to earn­ings ratios:

For Behe­moth com­pa­nies to achieve large earn­ings growth, they have to find monster-sized inno­va­tions to do so. Those don’t come along too reg­u­larly. Even for a com­pany as cre­ative as Apple (or Google), it becomes pro­gres­sively more dif­fi­cult to cre­ate prod­ucts that will raise earn­ings by a high per­cent­age quar­ter after quar­ter.
As a result it should not be a sur­prise that Behe­moth stocks trade at dis­counts to the mar­ket when global growth prospects are poor. They have more assets and free cash flow to put to work than is use­ful in a bad envi­ron­ment. Not every envi­ron­ment offers large opportunities.

The below chart out­lines, by sec­tor, the mar­ket cap of the cur­rent 39 behe­moths using data from a fol­low up post at Aleph Blog (he adds even more gran­u­lar­ity in his post).

I would also add that I believe these behe­moths trade at an aggre­gate dis­count due in part by their com­po­si­tion. Finan­cials (and to a lesser extent energy firms) trade at a large dis­count due to the dam­age they inflicted upon them­selves and the threat of future reg­u­la­tory restric­tions that may impede prof­itabil­ity, both of which may force them to dilute share­hold­ers as they raise / write-down cap­i­tal. Tech­nol­ogy firms on the other hand are con­stantly threat­ened by inno­va­tion and becom­ing irrel­e­vant by the next gen­er­a­tion of firms (i.e. what hap­pened to Yahoo via Google), thus earn­ings become dif­fi­cult to project past even a few years.

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