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Discover Financial Services (NYSE:DFS)
Shiller P/E Ratio
17.01 (As of Today)

As of today, Discover Financial Services's current share price is $65.34. Discover Financial Services's E10 for the quarter that ended in Sep. 2014 was $3.84. Discover Financial Services's Shiller P/E Ratio for today is 17.01.

DFS' s 10-Year Shiller P/E Ratio Range
Min: 10.3   Max: 17.2
Current: 17.01

10.3
17.2

During the past 11 years, Discover Financial Services's highest Shiller P/E Ratio was 17.20. The lowest was 10.30. And the median was 15.68.

DFS's Shiller P/E Ratiois ranked higher than
83% of the 198 Companies
in the Global Credit Services industry.

( Industry Median: 35.49 vs. DFS: 17.01 )

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.

Discover Financial Services's adjusted earnings per share data for the three months ended in Sep. 2014 was $1.372. 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 $3.84 for the trailing six years ended in Sep. 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.

Discover Financial Services's Shiller P/E Ratio for today is calculated as

Shiller P/E Ratio=Share Price/E10
=65.34/3.84
=17.02

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

Discover Financial Services's E10 for the fiscal year that ended in Dec13 is calculated as:

For example, Discover Financial Services's adjusted earnings per share data for the three months ended in Sep. 2014 was:

Adj_EPS=Earnigns per Share/CPI of Sep. 2014*CPI of Current
=1.37/238.031*238.389
=1.372

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

Current CPI = 238.389.

Discover Financial Services Quarterly Data

201208201211201212201303201306201309201312201403201406201409
per share eps 1.2101.0691.0601.3301.2001.2001.2381.3101.3501.370
CPI 230.379230.221229.601232.773233.504234.149233.049236.293238.343238.031
Adj_EPS 1.2521.1071.1011.3621.2251.2221.2661.3221.3501.372
201002201005201008201011201102201105201108201111201202201205
per share eps -0.2200.3300.4700.6350.8401.0901.1800.9491.1801.000
CPI 216.741218.178218.312218.803221.309225.964226.545226.230227.663229.815
Adj_EPS -0.2420.3610.5130.6920.9051.1501.2421.0001.2361.037
200902200905200908200911
per share eps 0.2500.4301.0700.586
CPI 212.193213.856215.834216.330
Adj_EPS 0.2810.4791.1820.646

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.

Discover Financial Services Annual Data

Nov03Nov05Nov06Nov07Nov08Nov09Nov10Nov11Nov12Dec13
ShillerPE 0.000.000.000.000.000.000.0010.7015.8616.37

Discover Financial Services Quarterly Data

Aug12Nov12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
ShillerPE 15.4315.8614.2415.4615.7715.5816.3716.2416.4116.78
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