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Aetna Inc  (NYSE:AET) E10: \$5.35 (As of Sep. 2017)

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.

Aetna Inc's adjusted earnings per share data for the three months ended in Sep. 2017 was \$2.520. Add all the adjusted EPS for the past 10 years together and divide 10 will get our e10, which is \$5.35 for the trailing ten years ended in Sep. 2017.

As of today, Aetna Inc's current stock price is \$176.23. Aetna Inc's E10 for the quarter that ended in Sep. 2017 was \$5.35. Aetna Inc's Shiller PE Ratio of today is 32.94.

During the past 13 years, the highest Shiller PE Ratio of Aetna Inc was 47.23. The lowest was 10.39. And the median was 19.44.

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Aetna Inc Annual Data

 Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 E10 3.70 4.11 4.23 4.63 5.01

Aetna Inc Quarterly Data

 Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17 Sep17 E10 5.07 5.01 4.85 5.16 5.35

Competitive Comparison
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap.

Calculation

E10 is a concept invented by Prof. Robert Shiller, who uses E10 for his Shiller P/E calculation. When we calculate the today's Shiller P/E ratio of a stock, we use todays price divided by E10.

What is E10? How do we calculate E10?

E10 is the average of the inflation adjusted earnings of a company over the past 10 years. Let's use an example to explain.

If we want to calculate the E10 of Wal-Mart (WMT) for Dec. 31, 2010, we need to have the inflation data and the earnings from 2001 through 2010.

We adjusted the earnings of 2001 earnings data with the total inflation from 2001 through 2010 to the equivalent earnings in 2010. If the total inflation from 2001 to 2010 is 40%, and Wal-Mart earned \$1 a share in 2001, then the 2001's equivalent earnings in 2010 is \$1.4 a share. If Wal-Mart earns \$1 again in 2002, and the total inflation from 2002 through 2010 is 35%, then the equivalent 2002 earnings in 2010 is \$1.35. So on and so forth, you get the equivalent earnings of past 10 years. Then you add them together and divided the sum by 10 to get E10.

For example, Aetna Inc's adjusted earnings per share data for the three months ended in Sep. 2017 was:

 Adj_EPS = Earnings per Share (Diluted) / CPI of Sep. 2017 (Change) * Current CPI (Sep. 2017) = 2.52 / 246.819 * 246.819 = 2.520

Current CPI (Sep. 2017) = 246.819.

Aetna Inc Quarterly Data

 per share eps CPI Adj_EPS 200712 0.860 210.036 1.011 200803 0.850 213.528 0.983 200806 0.970 218.815 1.094 200809 0.580 218.783 0.654 200812 0.430 210.228 0.505 200903 0.950 212.709 1.102 200906 0.770 215.693 0.881 200909 0.730 215.969 0.834 200912 0.380 215.949 0.434 201003 1.280 217.631 1.452 201006 1.140 217.965 1.291 201009 1.190 218.439 1.345 201012 0.570 219.179 0.642 201103 1.500 223.467 1.657 201106 1.390 225.722 1.520 201109 1.300 226.889 1.414 201112 1.030 225.672 1.127 201203 1.430 229.392 1.539 201206 1.320 229.478 1.420 201209 1.470 231.407 1.568 201212 0.580 229.601 0.623 201303 1.480 232.773 1.569 201306 1.490 233.504 1.575 201309 1.380 234.149 1.455 201312 0.980 233.049 1.038 201403 1.820 236.293 1.901 201406 1.520 238.343 1.574 201409 1.670 238.031 1.732 201412 0.670 234.812 0.704 201503 2.200 236.119 2.300 201506 2.080 238.638 2.151 201509 1.590 237.945 1.649 201512 0.910 236.525 0.950 201603 2.080 238.132 2.156 201606 2.230 241.018 2.284 201609 1.700 241.428 1.738 201612 0.390 241.432 0.399 201703 -1.110 243.801 -1.124 201706 3.600 244.955 3.627 201709 2.520 246.819 2.520

Add all the adjusted EPS together and divide 10 will get our e10.

Explanation

If a company grows much fast than inflation, E10 may underestimate the company's earnings power. Shiller PE Ratio can seem to be too high even the actual P/E is low.

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.

Aetna Inc's Shiller P/E Ratio of today is calculated as

 Shiller PE Ratio = Share Price / E10 = 176.23 / 5.35 = 32.94

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

During the past 13 years, the highest Shiller P/E Ratio of Aetna Inc was 47.23. The lowest was 10.39. And the median was 19.44.

Be Aware

Shiller PE Ratio works better for cyclical companies. It gives you a better idea on the company's real earnings power.

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