Switch to:
Arthur J Gallagher & Co (NYSE:AJG)
Shiller P/E Ratio
28.60 (As of Today)

As of today, Arthur J Gallagher & Co's current share price is $47.23. Arthur J Gallagher & Co's E10 for the quarter that ended in Jun. 2014 was $1.65. Arthur J Gallagher & Co's Shiller P/E Ratio for today is 28.60.

AJG' s 10-Year Shiller P/E Ratio Range
Min: 11.79   Max: 32.44
Current: 28.6

11.79
32.44

During the past 13 years, Arthur J Gallagher & Co's highest Shiller P/E Ratio was 32.44. The lowest was 11.79. And the median was 21.25.

AJG's Shiller P/E Ratiois ranked higher than
73% of the 439 Companies
in the Global Insurance Brokers industry.

( Industry Median: 94.31 vs. AJG: 28.60 )

E10 is a concept invented by Prof. Robert Shiller, who uses E10 for his Shiller P/E calculation. E10 is the average of the inflation adjusted earnings of a company over the past 10 years.

Arthur J Gallagher & Co's adjusted earnings per share data for the three months ended in Jun. 2014 was $0.703. Since most companies do not have as long as 10 years history, here we use 6 years to calculate. Add all the adjusted EPS for the past 6 years together and divide 6 will get our E10, which is $1.65 for the trailing six years ended in Jun. 2014.


Definition

For the Shiller P/E, the earnings of the past 10 years are inflation-adjusted and averaged. The result is used for P/E calculation. Since it looks at the average over the last 10 years, the Shiller P/E is also called PE10.

The Shiller P/E was first used by professor Robert Shiller to measure the valuation of the overall market. The same calculation is applied here to individual companies.

Arthur J Gallagher & Co's Shiller P/E Ratio for today is calculated as

Shiller P/E Ratio=Share Price/E10
=47.23/1.65
=28.62

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Arthur J Gallagher & Co's E10 for the fiscal year that ended in Dec13 is calculated as:

For example, Arthur J Gallagher & Co's adjusted earnings per share data for the three months ended in Jun. 2014 was:

Adj_EPS=Earnigns per Share/CPI of Jun. 2014*CPI of Current
=0.7/238.343*239.229
=0.703

Since most companies do not have as long as 10 years history, here we use 6 years to calculate:

Current CPI = 239.229.

Arthur J Gallagher & Co Quarterly Data

201203201206201209201212201303201306201309201312201403201406
per share eps 0.2400.5900.5000.2650.3200.7300.5700.4470.3600.700
CPI 229.392229.478231.407229.601232.773233.504234.149233.049236.293238.343
Adj_EPS 0.2500.6150.5170.2760.3290.7480.5820.4590.3640.703
200909200912201003201006201009201012201103201106201109201112
per share eps 0.4100.1650.2800.4200.4400.5100.1400.3700.4100.352
CPI 215.969215.949217.631217.965218.439219.179223.467225.722226.889225.672
Adj_EPS 0.4540.1830.3080.4610.4820.5570.1500.3920.4320.373
200809200812200903200906
per share eps 0.4000.0490.2700.440
CPI 218.783210.228212.709215.693
Adj_EPS 0.4370.0560.3040.488

Add all the adjusted EPS together and divide 6 will get our E10.


Explanation

Compared with the regular P/E ratio, which works poorly for cyclical businesses, the Shiller P/E smoothed out the fluctuations of profit margins during business cycles. Therefore it is more accurate in reflecting the valuation of the company.

If a company has consistent business performance, the Shiller P/E should give similar results to regular P/E.

Compared with the P/S ratio, the Shiller P/E makes the comparison between different industries more meaningful.


Be Aware

The Shiller P/E assumes that over the long term, businesses and profitability revert to their means. If a company’s business model does not work in the future compared with the past, the Shiller P/E and P/S ratio will give false valuations.


Related Terms

P/E Ratio, P/B Ratio, P/S Ratio, Price-to-Free-Cash-Flow ratio, E10


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Arthur J Gallagher & Co Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
ShillerPE 22.3722.6120.8516.7919.9418.1025.0824.5524.6431.35

Arthur J Gallagher & Co Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
ShillerPE 25.6124.6325.1624.6428.7729.3529.4531.3529.7528.09
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK