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Sherwin-Williams Co (NYSE:SHW)
Shiller P/E Ratio
46.22 (As of Today)

As of today, Sherwin-Williams Co's current share price is $264.85. Sherwin-Williams Co's E10 for the quarter that ended in Sep. 2014 was $5.73. Sherwin-Williams Co's Shiller P/E Ratio for today is 46.22.

SHW' s 10-Year Shiller P/E Ratio Range
Min: 11.52   Max: 46.22
Current: 46.19

11.52
46.22

During the past 13 years, Sherwin-Williams Co's highest Shiller P/E Ratio was 46.22. The lowest was 11.52. And the median was 23.76.

SHW's Shiller P/E Ratiois ranked higher than
73% of the 1167 Companies
in the Global Specialty Chemicals industry.

( Industry Median: 52.70 vs. SHW: 46.19 )

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.

Sherwin-Williams Co's adjusted earnings per share data for the three months ended in Sep. 2014 was $3.315. 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 $5.73 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.

Sherwin-Williams Co's Shiller P/E Ratio for today is calculated as

Shiller P/E Ratio=Share Price/E10
=264.85/5.73
=46.22

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

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

For example, Sherwin-Williams 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
=3.35/238.031*235.51
=3.315

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

Current CPI = 235.51.

Sherwin-Williams Co Quarterly Data

201206201209201212201303201306201309201312201403201406201409
per share eps 2.1702.2400.6681.1102.4602.5501.1671.1402.9403.350
CPI 229.478231.407229.601232.773233.504234.149233.049236.293238.343238.031
Adj_EPS 2.2272.2800.6851.1232.4812.5651.1791.1362.9053.315
200912201003201006201009201012201103201106201109201112201203
per share eps 0.5970.3001.6401.6000.6760.6301.6601.7100.1430.950
CPI 215.949217.631217.965218.439219.179223.467225.722226.889225.672229.392
Adj_EPS 0.6510.3251.7721.7250.7260.6641.7321.7750.1490.975
200812200903200906200909
per share eps 0.4240.3201.3501.510
CPI 210.228212.709215.693215.969
Adj_EPS 0.4750.3541.4741.647

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.

Sherwin-Williams Co Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
ShillerPE 27.3524.1624.6118.1816.2215.5219.8020.2332.9435.99

Sherwin-Williams Co Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
ShillerPE 28.9631.4132.9435.2635.9236.0635.9937.7537.6138.19
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