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

As of today, Arthur J. Gallagher & Co's current share price is $48.90. Arthur J. Gallagher & Co's E10 for the quarter that ended in Jun. 2016 was $1.70. Arthur J. Gallagher & Co's Shiller P/E Ratio for today is 28.76.

AJG' s Shiller P/E Ratio Range Over the Past 10 Years
Min: 11.45   Max: 33.77
Current: 28.87

11.45
33.77

During the past 13 years, Arthur J. Gallagher & Co's highest Shiller P/E Ratio was 33.77. The lowest was 11.45. And the median was 22.52.

AJG's Shiller P/E Ratio is ranked lower than
68% of the 84 Companies
in the Global Insurance Brokers industry.

( Industry Median: 23.97 vs. AJG: 28.87 )

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. 2016 was $0.840. Add all the adjusted EPS for the past 10 years together and divide 10 will get our E10, which is $1.70 for the trailing ten years ended in Jun. 2016.


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
=48.90/1.70
=28.76

* 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 Dec15 is calculated as:

For example, Arthur J. Gallagher & Co's adjusted earnings per share data for the three months ended in Jun. 2016 was:

Adj_EPS=Earnigns per Share/CPI of Jun. 2016 (Change)*Current CPI (Jun. 2016)
=0.84/241.038*241.038
=0.840

Current CPI (Jun. 2016) = 241.038.

Arthur J. Gallagher & Co Quarterly Data

201403201406201409201412201503201506201509201512201603201606
per share eps 0.3600.7000.5800.3000.1300.8100.7500.3400.2600.840
CPI 236.293238.343238.031234.812236.119238.638237.945236.525238.132241.038
Adj_EPS 0.3670.7080.5870.3080.1330.8180.7600.3460.2630.840
201109201112201203201206201209201212201303201306201309201312
per share eps 0.4100.3500.2400.5900.5000.2600.3200.7300.5700.450
CPI 226.889225.672229.392229.478231.407229.601232.773233.504234.149233.049
Adj_EPS 0.4360.3740.2520.6200.5210.2730.3310.7540.5870.465
200903200906200909200912201003201006201009201012201103201106
per share eps 0.2700.4400.4100.1600.2800.4200.4400.5100.1400.370
CPI 212.709215.693215.969215.949217.631217.965218.439219.179223.467225.722
Adj_EPS 0.3060.4920.4580.1790.3100.4640.4860.5610.1510.395
200609200612200703200706200709200712200803200806200809200812
per share eps 0.5100.2500.2000.4400.5400.250-0.0700.4400.4000.040
CPI 202.900201.800205.352208.352208.490210.036213.528218.815218.783210.228
Adj_EPS 0.6060.2990.2350.5090.6240.287-0.0790.4850.4410.046

Add all the adjusted EPS together and divide 10 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
ShillerPE 23.1617.6119.1916.0720.0723.2623.9731.6732.6425.31

Arthur J. Gallagher & Co Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
ShillerPE 32.1330.9930.4432.6429.9929.7725.7725.3127.1328.07
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