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

As of today, Johnson & Johnson's current share price is $102.30. Johnson & Johnson's E10 for the quarter that ended in Mar. 2014 was $4.63. Johnson & Johnson's Shiller P/E Ratio for today is 22.00.

JNJ' s 10-Year Shiller P/E Ratio Range
Min: 13.04   Max: 31.12
Current: 22

13.04
31.12

During the past 13 years, Johnson & Johnson's highest Shiller P/E Ratio was 31.12. The lowest was 13.04. And the median was 19.79.

JNJ's Shiller P/E Ratiois ranked higher than
90% of the 806 Companies
in the Global Drug Manufacturers - Major industry.

( Industry Median: 9999.00 vs. JNJ: 22.00 )

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 Mar. 2014 was $1.657. 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 $4.63 for the trailing six years ended in Mar. 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
=102.30/4.63
=22.10

* 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 Mar. 2014 was:

Adj_EPS=Earnigns per Share/CPI of Mar. 2014*CPI of Current
=1.64/236.293*238.786
=1.657

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

Current CPI = 238.786.

Johnson & Johnson Quarterly Data

201112201203201206201209201212201303201306201309201312201403
per share eps 0.0791.4100.5001.0500.9051.2201.3301.0401.2261.640
CPI 225.672229.392229.478231.407229.601232.773233.504234.149233.049236.293
Adj_EPS 0.0841.4680.5201.0830.9411.2521.3601.0611.2561.657
200906200909200912201003201006201009201012201103201106201109
per share eps 1.1501.2000.7901.6201.2301.2300.6991.2501.0001.150
CPI 215.693215.969215.949217.631217.965218.439219.179223.467225.722226.889
Adj_EPS 1.2731.3270.8741.7771.3471.3450.7621.3361.0581.210
200806200809200812200903
per share eps 1.1701.1700.9701.260
CPI 218.815218.783210.228212.709
Adj_EPS 1.2771.2771.1021.414

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 29.5924.0823.0520.7516.9216.4414.5015.1716.1520.15

Johnson & Johnson Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
ShillerPE 15.1714.8915.5915.7716.1518.4519.1319.2820.1521.21
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