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Coca-Cola Co (NYSE:KO)
Shiller P/E Ratio
21.81 (As of Today)

As of today, Coca-Cola Co's current share price is $42.96. Coca-Cola Co's E10 for the quarter that ended in Sep. 2014 was $1.97. Coca-Cola Co's Shiller P/E Ratio for today is 21.81.

KO' s 10-Year Shiller P/E Ratio Range
Min: 16.71   Max: 36.57
Current: 21.78

16.71
36.57

During the past 13 years, Coca-Cola Co's highest Shiller P/E Ratio was 36.57. The lowest was 16.71. And the median was 22.13.

KO's Shiller P/E Ratiois ranked higher than
92% of the 160 Companies
in the Global Beverages - Soft Drinks industry.

( Industry Median: 61.97 vs. KO: 21.78 )

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.

Coca-Cola Co's adjusted earnings per share data for the three months ended in Sep. 2014 was $0.475. 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 $1.97 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.

Coca-Cola Co's Shiller P/E Ratio for today is calculated as

Shiller P/E Ratio=Share Price/E10
=42.96/1.97
=21.81

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

Coca-Cola Co's E10 for the fiscal year that ended in Dec13 is calculated as:

For example, Coca-Cola Co'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
=0.48/238.031*235.51
=0.475

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

Current CPI = 235.51.

Coca-Cola Co Quarterly Data

201206201209201212201303201306201309201312201403201406201409
per share eps 0.6100.5000.4090.3900.5900.5400.3820.3600.5800.480
CPI 229.478231.407229.601232.773233.504234.149233.049236.293238.343238.031
Adj_EPS 0.6260.5090.4200.3950.5950.5430.3860.3590.5730.475
200912201003201006201009201012201103201106201109201112201203
per share eps 0.3290.3450.5100.4401.2250.4100.6000.4800.3590.450
CPI 215.949217.631217.965218.439219.179223.467225.722226.889225.672229.392
Adj_EPS 0.3590.3730.5510.4741.3160.4320.6260.4980.3750.462
200812200903200906200909
per share eps 0.2140.2900.4400.405
CPI 210.228212.709215.693215.969
Adj_EPS 0.2400.3210.4800.442

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.

Coca-Cola Co Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
ShillerPE 27.8523.8025.0628.8319.8322.8821.9721.1820.2321.69

Coca-Cola Co Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
ShillerPE 22.6421.4520.2321.9721.5120.0621.6920.0921.3421.63
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