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Avery Dennison Corp  (NYSE:AVY) E10: $1.76 (As of Jun. 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.

Avery Dennison Corp's adjusted earnings per share data for the three months ended in Jun. 2017 was $1.340. Add all the adjusted EPS for the past 10 years together and divide 10 will get our e10, which is $1.76 for the trailing ten years ended in Jun. 2017.

As of today, Avery Dennison Corp's current stock price is $99.71. Avery Dennison Corp's E10 for the quarter that ended in Jun. 2017 was $1.76. Avery Dennison Corp's Shiller PE Ratio of today is 56.65.

During the past 13 years, the highest Shiller PE Ratio of Avery Dennison Corp was 57.92. The lowest was 6.65. And the median was 20.70.


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.

Avery Dennison Corp 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 1.87 1.76 1.69 1.72 1.67

Avery Dennison Corp Quarterly Data

Sep12 Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17
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 1.73 1.73 1.67 1.71 1.76

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, Avery Dennison Corp's adjusted earnings per share data for the three months ended in Jun. 2017 was:

Adj_EPS= Earnings per Share (Diluted) /CPI of Jun. 2017 (Change)*Current CPI (Jun. 2017)
=1.34/244.955*244.955
=1.340

Current CPI (Jun. 2017) = 244.955.

Avery Dennison Corp Quarterly Data

per share eps CPI Adj_EPS
200709 0.590 208.490 0.693
200712 0.810 210.036 0.945
200803 0.690 213.528 0.792
200806 0.930 218.815 1.041
200809 0.630 218.783 0.705
200812 0.430 210.228 0.501
200903 -8.990 212.709 -10.353
200906 0.380 215.693 0.432
200909 0.590 215.969 0.669
200912 0.520 215.949 0.590
201003 0.510 217.631 0.574
201006 0.780 217.965 0.877
201009 0.600 218.439 0.673
201012 1.070 219.179 1.196
201103 0.420 223.467 0.460
201106 0.690 225.722 0.749
201109 0.470 226.889 0.507
201112 0.210 225.672 0.228
201203 0.410 229.392 0.438
201206 0.620 229.478 0.662
201209 0.570 231.407 0.603
201212 0.480 229.601 0.512
201303 0.570 232.773 0.600
201306 0.680 233.504 0.713
201309 0.470 234.149 0.492
201312 0.410 233.049 0.431
201403 0.730 236.293 0.757
201406 0.440 238.343 0.452
201409 0.630 238.031 0.648
201412 0.750 234.812 0.782
201503 0.780 236.119 0.809
201506 0.680 238.638 0.698
201509 0.880 237.945 0.906
201512 0.610 236.525 0.632
201603 0.980 238.132 1.008
201606 0.880 241.018 0.894
201609 0.980 241.428 0.994
201612 0.690 241.432 0.700
201703 1.250 243.801 1.256
201706 1.340 244.955 1.340

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.

Avery Dennison Corp's Shiller P/E Ratio of today is calculated as

Shiller PE Ratio=Share Price/E10
=99.71/1.76
=56.65

* 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 Avery Dennison Corp was 57.92. The lowest was 6.65. And the median was 20.70.


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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