Stocks versus bonds? U.S. equities win easily: Siegel

NEW YORK (Reuters) - If you're still torn about whether or not stocks are a buy, market historian Jeremy Siegel says to measure them against other asset classes, particularly U.S. Treasury securities.

"No question, there should be a strong bias in favor of equities," Seigel told a group of independent wealth managers in New York on Tuesday.

"It's not that I haven't seen the stock market cheaper ... it's that there is no competition from Treasuries," said Siegel, a noted professor at the University of Pennsylvania's Wharton School.

Figures back Siegel's argument. As of Friday, the S&P 500 index was sporting a price-to-earnings ratio of 15 times this year's estimated operating earnings and 21.8 times estimated reported earnings, respectively, Siegel said.

The index's operating earnings yield, a tool for comparing equity valuations with bonds, is 4.6 percent, topping the 3.9 percent yield on the 10-year U.S. Treasury note and matching the 30-year bond's yield.

When forecasts for 2009 reported earnings are used, the S&P's earnings yield stands out at 8.1 percent, Siegel said.

Siegel said U.S. equities had a run for their money in the mid-70s when Treasury yields were trading at eye-popping double-digit levels.

"Today, there is none of that with where government bonds are trading," he said, speaking at the semi-annual conference of Focus Financial Partners, a network of independent wealth management firms with about $28 billion in assets under management.

Siegel should know: His book, "Stocks for the Long Run," now in its fourth edition, made an argument five years ago that investors should consider ramping up their exposure to international equities.

Indeed, they have become one of the more remarkable performers during the current credit crisis.

(Reporting by Jennifer Ablan in New York; Editing by Jonathan Oatis)