Even after the biggest rally since the 1930s, U.S. stocks remain the cheapest in two decades as the economy improves, Bloomberg reported.

Profit estimates for Standard & Poor’s 500 index companies from Apple Inc. to Intel Corp. and CSX Corp. climbed 9.1 percent on average in April through the end of last week, twice the gain in their prices and the largest monthly increase since at least 2006, data compiled by Bloomberg show.

The benchmark gauge for American equities is trading at 14.2 times forecasts for its companies’ earnings, lower than any time since 1990, except for the months after Lehman Brothers Holdings Inc. collapsed.

Income is beating analysts’ estimates by 22 percent in the first quarter, making investors even more bullish that the rally will continue after the index climbed 80 percent since March 2009. Although bears say the economy’s recovery is too weak for earnings to keep up the momentum, Fisher Investments and BlackRock Inc. are snapping up companies whose results are linked to economic expansion.

“The stock market is incredibly inexpensive,” said Kevin Rendino, who manages $11 billion for BlackRock, the world’s largest asset manager. “I don’t know how the bears can argue against how well corporations are doing.”

S&P 500 companies may earn $85.96 a share in the next year, according to data from equity analysts compiled by Bloomberg. That compares with the index’s record combined profits of $89.93 a share from the prior 12 months in September 2007, when the S&P 500 was 19 percent higher than today.

However, some economists are making a counter argument. David Rosenberg, chief economist of Gluskin Sheff & Associates Inc., says U.S. stocks are poised for losses because they’ve become too expensive. The S&P 500 is valued at 22.1 times annual earnings from the past 10 years, according to inflation-adjusted data since 1871 tracked by Yale University Professor Robert Shiller.

Economic growth will slow and stocks retreat as governments around the world reduce spending after supporting their economies through the worst recession since the 1930s, said Komal Sri-Kumar, who helps manage more than $100 billion as chief global strategist at TCW Group Inc. Click here to read more.