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W W Grainger Inc (NYSE:GWW)
Shiller P/E Ratio
27.96 (As of Today)

As of today, W W Grainger Inc's current share price is $256.98. W W Grainger Inc's E10 for the quarter that ended in Sep. 2014 was $9.19. W W Grainger Inc's Shiller P/E Ratio for today is 27.96.

GWW' s 10-Year Shiller P/E Ratio Range
Min: 13.9   Max: 34.07
Current: 27.96

13.9
34.07

During the past 13 years, W W Grainger Inc's highest Shiller P/E Ratio was 34.07. The lowest was 13.90. And the median was 24.18.

GWW's Shiller P/E Ratiois ranked higher than
68% of the 239 Companies
in the Global Industrial Distribution industry.

( Industry Median: 36.60 vs. GWW: 27.96 )

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.

W W Grainger Inc's adjusted earnings per share data for the three months ended in Sep. 2014 was $3.265. 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 $9.19 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.

W W Grainger Inc's Shiller P/E Ratio for today is calculated as

Shiller P/E Ratio=Share Price/E10
=256.98/9.19
=27.96

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

W W Grainger Inc's E10 for the fiscal year that ended in Dec13 is calculated as:

For example, W W Grainger Inc'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
=3.3/238.031*235.51
=3.265

Since most companies do not have as long as 10 years history, GuruFocus uses 6 years to do the calculation.

Current CPI = 235.51.

W W Grainger Inc Quarterly Data

201206201209201212201303201306201309201312201403201406201409
per share eps 2.6302.1502.2072.9403.0302.9502.2333.0702.9403.300
CPI 229.478231.407229.601232.773233.504234.149233.049236.293238.343238.031
Adj_EPS 2.6992.1882.2642.9753.0562.9672.2573.0602.9053.265
200912201003201006201009201012201103201106201109201112201203
per share eps 1.3001.3101.7302.0601.8722.1802.3402.5102.0802.570
CPI 215.949217.631217.965218.439219.179223.467225.722226.889225.672229.392
Adj_EPS 1.4181.4181.8692.2212.0112.2972.4412.6052.1712.639
200812200903200906200909
per share eps 1.4221.2501.2101.880
CPI 210.228212.709215.693215.969
Adj_EPS 1.5931.3841.3212.050

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.

W W Grainger Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
ShillerPE 27.1625.4922.0923.1718.4219.9225.0428.9427.6430.40

W W Grainger Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
ShillerPE 27.2128.7927.6429.0931.4731.6730.4028.9328.0927.38
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