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Cato Corp  (NYSE:CATO) E10: $1.93 (As of Jul. 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.

Cato Corp's adjusted earnings per share data for the three months ended in Jul. 2017 was $-0.030. Add all the adjusted EPS for the past 10 years together and divide 10 will get our e10, which is $1.93 for the trailing ten years ended in Jul. 2017.

As of today, Cato Corp's current stock price is $13.59. Cato Corp's E10 for the quarter that ended in Jul. 2017 was $1.93. Cato Corp's Shiller PE Ratio of today is 7.04.

During the past 13 years, the highest Shiller PE Ratio of Cato Corp was 24.45. The lowest was 6.74. And the median was 16.72.


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.

Cato Corp Annual Data

Jan08 Jan09 Jan10 Jan11 Jan12 Jan13 Jan14 Jan15 Jan16 Jan17
E10 Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 1.64 1.75 1.82 1.91 1.94

Cato Corp Quarterly Data

Oct12 Jan13 Apr13 Jul13 Oct13 Jan14 Apr14 Jul14 Oct14 Jan15 Apr15 Jul15 Oct15 Jan16 Apr16 Jul16 Oct16 Jan17 Apr17 Jul17
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 2.01 2.02 1.94 1.98 1.93

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, Cato Corp's adjusted earnings per share data for the three months ended in Jul. 2017 was:

Adj_EPS= Earnings per Share (Diluted) /CPI of Jul. 2017 (Change)*Current CPI (Jul. 2017)
=-0.03/244.786*244.786
=-0.030

Current CPI (Jul. 2017) = 244.786.

Cato Corp Quarterly Data

per share eps CPI Adj_EPS
200710 0.090 208.936 0.105
200801 -0.050 211.080 -0.058
200804 0.580 214.823 0.661
200807 0.410 219.964 0.456
200810 0.030 216.573 0.034
200901 0.130 211.143 0.151
200904 0.640 213.240 0.735
200907 0.560 215.351 0.637
200910 0.100 216.177 0.113
201001 0.240 216.687 0.271
201004 0.850 218.009 0.954
201007 0.580 218.011 0.651
201010 0.200 218.711 0.224
201101 0.380 220.223 0.422
201104 1.040 224.906 1.132
201107 0.610 225.922 0.661
201110 0.210 226.421 0.227
201201 0.350 226.665 0.378
201204 1.090 230.085 1.160
201207 0.590 229.104 0.630
201210 0.160 231.317 0.169
201301 0.270 230.280 0.287
201304 1.050 232.531 1.105
201307 0.510 233.596 0.534
201310 0.170 233.546 0.178
201401 0.130 233.916 0.136
201404 1.040 237.072 1.074
201407 0.560 238.250 0.575
201410 0.200 237.433 0.206
201501 0.330 233.707 0.346
201504 1.110 236.599 1.148
201507 0.560 238.654 0.574
201510 0.300 237.838 0.309
201601 0.420 236.916 0.434
201604 1.290 239.261 1.320
201607 0.570 240.628 0.580
201610 0.300 241.729 0.304
201701 -0.450 242.839 -0.454
201704 0.850 244.524 0.851
201707 -0.030 244.786 -0.030

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.

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

Shiller PE Ratio=Share Price/E10
=13.59/1.93
=7.04

* 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 Cato Corp was 24.45. The lowest was 6.74. And the median was 16.72.


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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