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McCormick & Company Inc (NYSE:MKC)
Shiller P/E Ratio
24.20 (As of Today)

As of today, McCormick & Company Inc's current share price is $71.39. McCormick & Company Inc's E10 for the quarter that ended in Nov. 2014 was $2.95. McCormick & Company Inc's Shiller P/E Ratio for today is 24.20.

MKC' s 10-Year Shiller P/E Ratio Range
Min: 16.28   Max: 31.2
Current: 24.1

16.28
31.2

During the past 13 years, McCormick & Company Inc's highest Shiller P/E Ratio was 31.20. The lowest was 16.28. And the median was 23.40.

MKC's Shiller P/E Ratiois ranked higher than
83% of the 1826 Companies
in the Global Packaged Foods industry.

( Industry Median: 55.19 vs. MKC: 24.10 )

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.

McCormick & Company Inc's adjusted earnings per share data for the three months ended in Nov. 2014 was $1.133. 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 $2.95 for the trailing six years ended in Nov. 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.

McCormick & Company Inc's Shiller P/E Ratio for today is calculated as

Shiller P/E Ratio=Share Price/E10
=71.39/2.95
=24.20

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

McCormick & Company Inc's E10 for the fiscal year that ended in Nov14 is calculated as:

For example, McCormick & Company Inc's adjusted earnings per share data for the three months ended in Nov. 2014 was:

Adj_EPS=Earnigns per Share/CPI of Nov. 2014*CPI of Current
=1.138/236.151*235.189
=1.133

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

Current CPI = 235.189.

McCormick & Company Inc Quarterly Data

201208201211201302201305201308201311201402201405201408201411
per share eps 0.7801.0800.5700.5900.7800.9650.6200.6400.9401.138
CPI 230.379230.221232.166232.945233.877233.069234.781237.900237.852236.151
Adj_EPS 0.7961.1030.5770.5960.7840.9740.6210.6330.9291.133
201002201005201008201011201102201105201108201111201202201205
per share eps 0.5100.4900.7600.9860.5700.5500.6900.9810.5500.600
CPI 216.741218.178218.312218.803221.309225.964226.545226.230227.663229.815
Adj_EPS 0.5530.5280.8191.0600.6060.5720.7161.0200.5680.614
200902200905200908200911
per share eps 0.4400.3800.5700.875
CPI 212.193213.856215.834216.330
Adj_EPS 0.4880.4180.6210.951

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.

McCormick & Company Inc Annual Data

Nov05Nov06Nov07Nov08Nov09Nov10Nov11Nov12Nov13Nov14
ShillerPE 22.1425.9123.1217.1819.3421.3521.3625.3525.370.00

McCormick & Company Inc Quarterly Data

Aug12Nov12Feb13May13Aug13Nov13Feb14May14Aug14Nov14
ShillerPE 24.7225.3525.9526.4225.0425.3723.6425.3624.190.00
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