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Canon Inc  (NYSE:CAJ) E10: $1.94 (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.

Canon Inc's adjusted earnings per share data for the three months ended in Jun. 2017 was $0.573. Add all the adjusted EPS for the past 10 years together and divide 10 will get our e10, which is $1.94 for the trailing ten years ended in Jun. 2017.

As of today, Canon Inc's current stock price is $35.78. Canon Inc's E10 for the quarter that ended in Jun. 2017 was $1.94. Canon Inc's Shiller PE Ratio of today is 18.44.

During the past 13 years, the highest Shiller PE Ratio of Canon Inc was 36.36. The lowest was 8.66. And the median was 13.75.


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.

Canon 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 3.29 2.66 2.23 2.12 2.02

Canon Inc 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 2.48 2.42 2.02 2.09 1.94

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, Canon Inc'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)
=0.572785606158/244.955*244.955
=0.573

Current CPI (Jun. 2017) = 244.955.

Canon Inc Quarterly Data

per share eps CPI Adj_EPS
200709 0.709 208.490 0.833
200712 0.898 210.036 1.047
200803 0.841 213.528 0.965
200806 0.800 218.815 0.895
200809 0.618 218.783 0.692
200812 0.112 210.228 0.130
200903 0.147 212.709 0.169
200906 0.131 215.693 0.149
200909 0.326 215.969 0.370
200912 0.554 215.949 0.629
201003 0.507 217.631 0.571
201006 0.602 217.965 0.676
201009 0.653 218.439 0.732
201012 0.527 219.179 0.589
201103 0.553 223.467 0.606
201106 0.547 225.722 0.594
201109 0.839 226.889 0.906
201112 0.656 225.672 0.713
201203 0.625 229.392 0.667
201206 0.551 229.478 0.588
201209 0.552 231.407 0.585
201212 0.631 229.601 0.673
201303 0.374 232.773 0.394
201306 0.593 233.504 0.622
201309 0.516 234.149 0.540
201312 0.545 233.049 0.573
201403 0.411 236.293 0.427
201406 0.711 238.343 0.731
201409 0.490 238.031 0.505
201412 0.519 234.812 0.541
201503 0.258 236.119 0.268
201506 0.505 238.638 0.518
201509 0.375 237.945 0.386
201512 0.519 236.525 0.537
201603 0.227 238.132 0.233
201606 0.465 241.018 0.472
201609 0.219 241.428 0.223
201612 0.354 241.432 0.359
201703 0.447 243.801 0.449
201706 0.573 244.955 0.573

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.

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

Shiller PE Ratio=Share Price/E10
=35.78/1.94
=18.44

* 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 Canon Inc was 36.36. The lowest was 8.66. And the median was 13.75.


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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