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

As of today, McCormick & Company Inc's current share price is $74.68. McCormick & Company Inc's E10 for the quarter that ended in Aug. 2014 was $2.88. McCormick & Company Inc's Shiller P/E Ratio for today is 25.93.

MKC' s 10-Year Shiller P/E Ratio Range
Min: 16.28   Max: 31.2
Current: 25.5

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 23.32.

MKC's Shiller P/E Ratiois ranked higher than
83% of the 1814 Companies
in the Global Packaged Foods industry.

( Industry Median: 53.11 vs. MKC: 25.50 )

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.

McCormick & Company Inc's adjusted earnings per share data for the three months ended in Aug. 2014 was $0.931. 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 $2.88 for the trailing six years ended in Aug. 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
=74.68/2.88
=25.93

* 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 Nov13 is calculated as:

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

Adj_EPS=Earnigns per Share/CPI of Aug. 2014*CPI of Current
=0.94/237.852*235.51
=0.931

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

Current CPI = 235.51.

McCormick & Company Inc Quarterly Data

201205201208201211201302201305201308201311201402201405201408
per share eps 0.6000.7801.0800.5700.5900.7800.9650.6200.6400.940
CPI 229.815230.379230.221232.166232.945233.877233.069234.781237.900237.852
Adj_EPS 0.6150.7971.1050.5780.5960.7850.9750.6220.6340.931
200911201002201005201008201011201102201105201108201111201202
per share eps 0.8750.5100.4900.7600.9860.5700.5500.6900.9810.550
CPI 216.330216.741218.178218.312218.803221.309225.964226.545226.230227.663
Adj_EPS 0.9530.5540.5290.8201.0610.6070.5730.7171.0210.569
200811200902200905200908
per share eps 0.6220.4400.3800.570
CPI 212.425212.193213.856215.834
Adj_EPS 0.6900.4880.4180.622

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

Nov04Nov05Nov06Nov07Nov08Nov09Nov10Nov11Nov12Nov13
ShillerPE 29.2422.1025.8523.0817.1519.3321.5221.3425.3425.36

McCormick & Company Inc Quarterly Data

May12Aug12Nov12Feb13May13Aug13Nov13Feb14May14Aug14
ShillerPE 23.3724.7025.3425.9326.4025.0325.3623.6325.3424.17
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