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As of today, Watsco Inc's current share price is $133.47. Watsco Inc's E10 for the quarter that ended in Mar. 2016 was $3.11. Watsco Inc's Shiller P/E Ratio for today is 42.92.
During the past 13 years, Watsco Inc's highest Shiller P/E Ratio was 44.03. The lowest was 17.10. And the median was 31.14.
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.
Watsco Inc's adjusted earnings per share data for the three months ended in Mar. 2016 was $0.710. Add all the adjusted EPS for the past 10 years together and divide 10 will get our E10, which is $3.11 for the trailing ten years ended in Mar. 2016.
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.
Watsco Inc's Shiller P/E Ratio for today is calculated as
|Shiller P/E Ratio||=||Share Price||/||E10|
Watsco Inc's E10 for the fiscal year that ended in Dec15 is calculated as:
For example, Watsco Inc's adjusted earnings per share data for the three months ended in Mar. 2016 was:
|Adj_EPS||=||Earnigns per Share||/||CPI of Mar. 2016 (Change)||*||Current CPI (Mar. 2016)|
Current CPI (Mar. 2016) = 238.132.
Watsco Inc Quarterly Data
|per share eps||0.256||0.480||1.600||1.560||0.390||0.650||1.850||1.640||0.395||0.710|
|per share eps||1.090||1.020||0.435||0.230||1.150||1.190||0.459||0.390||1.480||1.320|
|per share eps||0.124||-0.070||0.560||0.660||0.233||0.100||1.080||0.970||0.341||0.210|
|per share eps||1.030||1.050||0.415||0.390||0.820||0.900||0.241||0.280||0.900||0.810|
Add all the adjusted EPS together and divide 10 will get our E10.
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.
The Shiller P/E assumes that over the long term, businesses and profitability revert to their means. If a companys business model does not work in the future compared with the past, the Shiller P/E and P/S ratio will give false valuations.
Watsco Inc Annual Data
Watsco Inc Quarterly Data