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ARMOUR Residential REIT Inc  (NYSE:ARR) E10: $0.89 (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.

ARMOUR Residential REIT Inc's adjusted earnings per share data for the three months ended in Sep. 2017 was $0.580. Add all the adjusted EPS for the past 10 years together and divide 10 will get our e10, which is $0.89 for the trailing ten years ended in Sep. 2017.

As of today, ARMOUR Residential REIT Inc's current stock price is $24.82. ARMOUR Residential REIT Inc's E10 for the quarter that ended in Sep. 2017 was $0.89. ARMOUR Residential REIT Inc's Shiller PE Ratio of today is 27.89.

During the past 10 years, the highest Shiller PE Ratio of ARMOUR Residential REIT Inc was 30.48. The lowest was 27.20. And the median was 29.64.


Historical Data

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

* Premium members only.

ARMOUR Residential REIT Inc Annual Data

Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Dec16
E10 Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 0.00 0.00 0.00 0.00 0.00

ARMOUR Residential REIT Inc Quarterly Data

Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17 Sep17
E10 Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 0.00 0.00 0.00 0.00 0.89

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, ARMOUR Residential REIT 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)
=0.58/246.819*246.819
=0.580

Current CPI (Sep. 2017) = 246.819.

ARMOUR Residential REIT Inc Quarterly Data

per share eps CPI Adj_EPS
200712 0.406 210.036 0.477
200803 0.400 213.528 0.462
200806 0.160 218.815 0.180
200809 0.160 218.783 0.181
200812 -0.560 210.228 -0.657
200903 0.000 212.709 0.000
200906 -0.160 215.693 -0.183
200909 -0.320 215.969 -0.366
200912 -0.400 215.949 -0.457
201003 1.040 217.631 1.179
201006 -1.760 217.965 -1.993
201009 -0.480 218.439 -0.542
201012 10.560 219.179 11.892
201103 2.640 223.467 2.916
201106 -1.120 225.722 -1.225
201109 -3.520 226.889 -3.829
201112 3.840 225.672 4.200
201203 3.840 229.392 4.132
201206 -0.640 229.478 -0.688
201209 1.600 231.407 1.707
201212 3.520 229.601 3.784
201303 2.320 232.773 2.460
201306 10.240 233.504 10.824
201309 -5.040 234.149 -5.313
201312 -14.640 233.049 -15.505
201403 -0.560 236.293 -0.585
201406 -1.680 238.343 -1.740
201409 1.120 238.031 1.161
201412 -3.280 234.812 -3.448
201503 -2.960 236.119 -3.094
201506 4.400 238.638 4.551
201509 -5.180 237.945 -5.373
201512 2.590 236.525 2.703
201603 -7.730 238.132 -8.012
201606 0.470 241.018 0.481
201609 3.120 241.428 3.190
201612 2.450 241.432 2.505
201703 1.330 243.801 1.346
201706 0.700 244.955 0.705
201709 0.580 246.819 0.580

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.

ARMOUR Residential REIT Inc's Shiller P/E Ratio of today is calculated as

Shiller PE Ratio=Share Price/E10
=24.82/0.89
=27.89

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

During the past 10 years, the highest Shiller P/E Ratio of ARMOUR Residential REIT Inc was 30.48. The lowest was 27.20. And the median was 29.64.


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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