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

As of today, Arthur J Gallagher & Co's current share price is $46.87. Arthur J Gallagher & Co's E10 for the quarter that ended in Mar. 2014 was $1.60. Arthur J Gallagher & Co's Shiller P/E Ratio for today is 29.10.

AJG' s 10-Year Shiller P/E Ratio Range
Min: 11.79   Max: 32.44
Current: 29.1

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 21.20.

AJG's Shiller P/E Ratiois ranked higher than
80% of the 439 Companies
in the Global Insurance Brokers industry.

( Industry Median: 9999.00 vs. AJG: 29.10 )

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. 2014 was $0.365. 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 $1.60 for the trailing six years ended in Mar. 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
=46.87/1.60
=29.29

* 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 Mar. 2014 was:

Adj_EPS=Earnigns per Share/CPI of Mar. 2014*CPI of Current
=0.36/236.293*239.556
=0.365

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

Current CPI = 239.556.

Arthur J Gallagher & Co Quarterly Data

201112201203201206201209201212201303201306201309201312201403
per share eps 0.3520.2400.5900.5000.2650.3200.7300.5700.4470.360
CPI 225.672229.392229.478231.407229.601232.773233.504234.149233.049236.293
Adj_EPS 0.3740.2510.6160.5180.2760.3290.7490.5830.4590.365
200906200909200912201003201006201009201012201103201106201109
per share eps 0.4400.4100.1650.2800.4200.4400.5100.1400.3700.410
CPI 215.693215.969215.949217.631217.965218.439219.179223.467225.722226.889
Adj_EPS 0.4890.4550.1830.3080.4620.4830.5570.1500.3930.433
200806200809200812200903
per share eps 0.4400.4000.0490.270
CPI 218.815218.783210.228212.709
Adj_EPS 0.4820.4380.0560.304

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 22.3522.5820.8316.7819.9318.0925.0724.5424.6131.30

Arthur J Gallagher & Co Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
ShillerPE 24.5425.6024.6225.3824.6128.7429.5829.4031.3029.70
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
Email Hide