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

As of today, Arthur J Gallagher & Co's current share price is $46.80. Arthur J Gallagher & Co's E10 for the quarter that ended in Dec. 2014 was $1.68. Arthur J Gallagher & Co's Shiller P/E Ratio for today is 27.86.

AJG' s 10-Year Shiller P/E Ratio Range
Min: 11.7   Max: 32.44
Current: 27.6

11.7
32.44

During the past 13 years, Arthur J Gallagher & Co's highest Shiller P/E Ratio was 32.44. The lowest was 11.70. And the median was 21.25.

AJG's Shiller P/E Ratiois ranked higher than
77% of the 489 Companies
in the Global Insurance Brokers industry.

( Industry Median: 42.90 vs. AJG: 27.60 )

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 Dec. 2014 was $0.313. 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 $1.68 for the trailing six years ended in Dec. 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
=46.80/1.68
=27.86

* 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 Dec14 is calculated as:

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

Adj_EPS=Earnigns per Share/CPI of Dec. 2014*CPI of Current
=0.314/234.812*233.808
=0.313

Since most companies do not have as long as 10 years history, GuruFocus uses 6 years to do the calculation.

Current CPI = 233.808.

Arthur J Gallagher & Co Quarterly Data

201209201212201303201306201309201312201403201406201409201412
per share eps 0.5000.2650.3200.7300.5700.4470.3600.7000.5800.314
CPI 231.407229.601232.773233.504234.149233.049236.293238.343238.031234.812
Adj_EPS 0.5050.2700.3210.7310.5690.4480.3560.6870.5700.313
201003201006201009201012201103201106201109201112201203201206
per share eps 0.2800.4200.4400.5100.1400.3700.4100.3520.2400.590
CPI 217.631217.965218.439219.179223.467225.722226.889225.672229.392229.478
Adj_EPS 0.3010.4510.4710.5440.1460.3830.4230.3650.2450.601
200903200906200909200912
per share eps 0.2700.4400.4100.165
CPI 212.709215.693215.969215.949
Adj_EPS 0.2970.4770.4440.179

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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
ShillerPE 22.5620.8016.7419.8818.0525.2324.6824.7231.1327.99

Arthur J Gallagher & Co Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
ShillerPE 25.2524.7228.5929.4329.5231.1329.8228.2727.1227.99
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