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Johnson & Johnson (NYSE:JNJ)
Shiller P/E Ratio
22.50 (As of Today)

As of today, Johnson & Johnson's current share price is $105.88. Johnson & Johnson's E10 for the quarter that ended in Jun. 2014 was $4.70. Johnson & Johnson's Shiller P/E Ratio for today is 22.50.

JNJ' s 10-Year Shiller P/E Ratio Range
Min: 13.11   Max: 31.12
Current: 22.5

13.11
31.12

During the past 13 years, Johnson & Johnson's highest Shiller P/E Ratio was 31.12. The lowest was 13.11. And the median was 19.78.

JNJ's Shiller P/E Ratiois ranked higher than
89% of the 831 Companies
in the Global Drug Manufacturers - Major industry.

( Industry Median: 121.61 vs. JNJ: 22.50 )

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.

Johnson & Johnson's adjusted earnings per share data for the three months ended in Jun. 2014 was $1.508. 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 $4.70 for the trailing six years ended in Jun. 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.

Johnson & Johnson's Shiller P/E Ratio for today is calculated as

Shiller P/E Ratio=Share Price/E10
=105.88/4.70
=22.53

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

Johnson & Johnson's E10 for the fiscal year that ended in Dec13 is calculated as:

For example, Johnson & Johnson's adjusted earnings per share data for the three months ended in Jun. 2014 was:

Adj_EPS=Earnigns per Share/CPI of Jun. 2014*CPI of Current
=1.51/238.343*238.064
=1.508

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

Current CPI = 238.064.

Johnson & Johnson Quarterly Data

201203201206201209201212201303201306201309201312201403201406
per share eps 1.4100.5001.0500.9051.2201.3301.0401.2261.6401.510
CPI 229.392229.478231.407229.601232.773233.504234.149233.049236.293238.343
Adj_EPS 1.4630.5191.0800.9381.2481.3561.0571.2521.6521.508
200909200912201003201006201009201012201103201106201109201112
per share eps 1.2000.7901.6201.2301.2300.6991.2501.0001.1500.079
CPI 215.969215.949217.631217.965218.439219.179223.467225.722226.889225.672
Adj_EPS 1.3230.8711.7721.3431.3410.7591.3321.0551.2070.083
200809200812200903200906
per share eps 1.1700.9701.2601.150
CPI 218.783210.228212.709215.693
Adj_EPS 1.2731.0981.4101.269

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.

Johnson & Johnson Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
ShillerPE 29.6924.1623.1520.6716.8516.3714.5815.1116.2320.22

Johnson & Johnson Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
ShillerPE 14.9715.6715.8416.2318.3619.2219.3620.2221.2822.33
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