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Cincinnati Financial Corp  (NAS:CINF) E10: $3.06 (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.

Cincinnati Financial Corp's adjusted earnings per share data for the three months ended in Sep. 2017 was $0.610. Add all the adjusted EPS for the past 10 years together and divide 10 will get our e10, which is $3.06 for the trailing ten years ended in Sep. 2017.

As of today, Cincinnati Financial Corp's current stock price is $72.66. Cincinnati Financial Corp's E10 for the quarter that ended in Sep. 2017 was $3.06. Cincinnati Financial Corp's Shiller PE Ratio of today is 23.75.

During the past 13 years, the highest Shiller PE Ratio of Cincinnati Financial Corp was 26.33. The lowest was 6.54. And the median was 13.71.


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.

Cincinnati Financial 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 3.37 3.48 3.39 3.39 3.18

Cincinnati Financial Corp 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 3.21 3.18 3.20 3.05 3.06

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, Cincinnati Financial Corp'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)
=0.61/246.819*246.819
=0.610

Current CPI (Sep. 2017) = 246.819.

Cincinnati Financial Corp Quarterly Data

per share eps CPI Adj_EPS
200712 1.110 210.036 1.304
200803 -0.260 213.528 -0.301
200806 0.380 218.815 0.429
200809 1.500 218.783 1.692
200812 0.980 210.228 1.151
200903 0.220 212.709 0.255
200906 -0.120 215.693 -0.137
200909 1.050 215.969 1.200
200912 1.500 215.949 1.714
201003 0.420 217.631 0.476
201006 0.170 217.965 0.193
201009 0.950 218.439 1.073
201012 0.760 219.179 0.856
201103 0.380 223.467 0.420
201106 -0.310 225.722 -0.339
201109 0.120 226.889 0.131
201112 0.820 225.672 0.897
201203 0.530 229.392 0.570
201206 0.200 229.478 0.215
201209 0.680 231.407 0.725
201212 1.170 229.601 1.258
201303 0.940 232.773 0.997
201306 0.660 233.504 0.698
201309 0.790 234.149 0.833
201312 0.730 233.049 0.773
201403 0.550 236.293 0.575
201406 0.510 238.343 0.528
201409 1.110 238.031 1.151
201412 1.010 234.812 1.062
201503 0.770 236.119 0.805
201506 1.060 238.638 1.096
201509 1.050 237.945 1.089
201512 0.940 236.525 0.981
201603 1.130 238.132 1.171
201606 0.740 241.018 0.758
201609 1.080 241.428 1.104
201612 0.600 241.432 0.613
201703 1.210 243.801 1.225
201706 0.600 244.955 0.605
201709 0.610 246.819 0.610

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.

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

Shiller PE Ratio=Share Price/E10
=72.66/3.06
=23.75

* 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 Cincinnati Financial Corp was 26.33. The lowest was 6.54. And the median was 13.71.


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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