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Diageo PLC (NYSE:DEO)
Shiller P/E Ratio
23.90 (As of Today)

As of today, Diageo PLC's current share price is $124.15. Diageo PLC's E10 for the quarter that ended in Dec. 2013 was $4.95. Diageo PLC's Shiller P/E Ratio for today is 23.90.

DEO' s 10-Year Shiller P/E Ratio Range
Min: 14.32   Max: 30.07
Current: 23.9

14.32
30.07

During the past 13 years, Diageo PLC's highest Shiller P/E Ratio was 30.07. The lowest was 14.32. And the median was 22.13.

DEO's Shiller P/E Ratiois ranked higher than
85% of the 261 Companies
in the Global Beverages - Wineries & Distilleries industry.

( Industry Median: 31.36 vs. DEO: 23.90 )

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.

Diageo PLC's adjusted earnings per share data of for the fiscal year that ended in Jun13 was $6.146. 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 $4.95 for the trailing six years ended in Jun13.


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.

Diageo PLC's Shiller P/E Ratio for today is calculated as

Shiller P/E Ratio=Share Price/E10
=124.15/4.95
=25.08

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Diageo PLC's E10 for the quarter that ended in Dec. 2013 is calculated as:

For example, Diageo PLC's adjusted earnings per share data for the fiscal year that ended in Jun13 was:

Adj_EPS=Earnigns per Share/CPI of Jun13*CPI of Current
=5.9908952959/233.504*239.556
=6.146

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

Current CPI = 239.556.

Diageo PLC Annual Data

200806200906201006201106201206201306
per share eps 4.6844.2164.0004.9114.8305.991
CPI 218.815215.693217.965225.722229.478233.504
Adj_EPS 5.1284.6824.3965.2125.0426.146

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.

Diageo PLC Annual Data

Jun04Jun05Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13
ShillerPE 22.3322.4620.8122.0818.6614.8017.2018.8123.7324.70

Diageo PLC Semi-Annual Data

Jun09Dec09Jun10Dec10Jun11Dec11Jun12Dec12Jun13Dec13
ShillerPE 14.800.0017.200.0018.810.0023.730.0024.700.00
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