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As of today, BHP Billiton Ltd's current share price is $44.63. BHP Billiton Ltd's E10 for the quarter that ended in Dec. 2014 was $5.33. BHP Billiton Ltd's Shiller P/E Ratio for today is 8.37.
During the past 13 years, BHP Billiton Ltd's highest Shiller P/E Ratio was 73.78. The lowest was 9.16. And the median was 18.09.
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.
BHP Billiton Ltd's adjusted earnings per share data of for the fiscal year that ended in Jun14 was $5.156. 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 $5.33 for the trailing six years ended in Jun14.
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.
BHP Billiton Ltd's Shiller P/E Ratio for today is calculated as
|Shiller P/E Ratio||=||Share Price||/||E10|
* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.
BHP Billiton Ltd's E10 for the quarter that ended in Dec. 2014 is calculated as:
For example, BHP Billiton Ltd's adjusted earnings per share data for the fiscal year that ended in Jun14 was:
|Adj_EPS||=||Earnigns per Share||/||CPI of Jun14||*||CPI of Current|
Since most companies do not have as long as 10 years history, GuruFocus uses 6 years to do the calculation.
Current CPI = 237.167.
BHP Billiton Ltd Annual Data
|per share eps||2.108||4.556||8.538||5.768||4.204||5.182|
Add all the adjusted EPS together and divide 6 will get our E10.
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.
The Shiller P/E assumes that over the long term, businesses and profitability revert to their means. If a companys business model does not work in the future compared with the past, the Shiller P/E and P/S ratio will give false valuations.
BHP Billiton Ltd Annual Data
BHP Billiton Ltd Semi-Annual Data