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

As of today, Arthur J Gallagher & Co's current share price is $47.75. Arthur J Gallagher & Co's E10 for the quarter that ended in Mar. 2015 was $1.67. Arthur J Gallagher & Co's Shiller P/E Ratio for today is 28.59.

AJG' s 10-Year Shiller P/E Ratio Range
Min: 11.7   Max: 32.44
Current: 28.6

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 21.21.

AJG's Shiller P/E Ratiois ranked higher than
87% of the 804 Companies
in the Global Insurance Brokers industry.

( Industry Median: 0.00 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 Mar. 2015 was $0.130. 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 $1.67 for the trailing six years ended in Mar. 2015.


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
=47.75/1.67
=28.59

* 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 Mar. 2015 was:

Adj_EPS=Earnigns per Share/CPI of Mar. 2015*CPI of Current
=0.13/236.119*236.818
=0.130

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

Current CPI = 236.818.

Arthur J Gallagher & Co Quarterly Data

201212201303201306201309201312201403201406201409201412201503
per share eps 0.2650.3200.7300.5700.4470.3600.7000.5800.3140.130
CPI 229.601232.773233.504234.149233.049236.293238.343238.031234.812236.119
Adj_EPS 0.2730.3260.7400.5760.4540.3610.6960.5770.3170.130
201006201009201012201103201106201109201112201203201206201209
per share eps 0.4200.4400.5100.1400.3700.4100.3520.2400.5900.500
CPI 217.965218.439219.179223.467225.722226.889225.672229.392229.478231.407
Adj_EPS 0.4560.4770.5510.1480.3880.4280.3690.2480.6090.512
200906200909200912201003
per share eps 0.4400.4100.1650.280
CPI 215.693215.969215.949217.631
Adj_EPS 0.4830.4500.1810.305

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 22.4820.7116.8219.9818.1325.1224.5724.6531.3727.93

Arthur J Gallagher & Co Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
ShillerPE 24.6528.7829.3629.4631.3729.7628.2127.0727.9327.92
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