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Chevron Corp  (NYSE:CVX) E10: $9.02 (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.

Chevron Corp's adjusted earnings per share data for the three months ended in Jun. 2017 was $0.770. Add all the adjusted EPS for the past 10 years together and divide 10 will get our e10, which is $9.02 for the trailing ten years ended in Jun. 2017.

As of today, Chevron Corp's current stock price is $118.64. Chevron Corp's E10 for the quarter that ended in Jun. 2017 was $9.02. Chevron Corp's Shiller PE Ratio of today is 13.15.

During the past 13 years, the highest Shiller PE Ratio of Chevron Corp was 21.86. The lowest was 7.29. And the median was 12.31.


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.

Chevron 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 9.32 10.07 10.39 9.94 9.18

Chevron 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 9.57 9.37 9.18 9.15 9.02

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, Chevron 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)
=0.77/244.955*244.955
=0.770

Current CPI (Jun. 2017) = 244.955.

Chevron Corp Quarterly Data

per share eps CPI Adj_EPS
200709 1.750 208.490 2.056
200712 2.320 210.036 2.706
200803 2.480 213.528 2.845
200806 2.900 218.815 3.246
200809 3.850 218.783 4.311
200812 2.440 210.228 2.843
200903 0.920 212.709 1.059
200906 0.870 215.693 0.988
200909 1.920 215.969 2.178
200912 1.530 215.949 1.736
201003 2.270 217.631 2.555
201006 2.700 217.965 3.034
201009 1.870 218.439 2.097
201012 2.640 219.179 2.950
201103 3.090 223.467 3.387
201106 3.850 225.722 4.178
201109 3.920 226.889 4.232
201112 2.580 225.672 2.800
201203 3.270 229.392 3.492
201206 3.660 229.478 3.907
201209 2.690 231.407 2.847
201212 3.700 229.601 3.947
201303 3.180 232.773 3.346
201306 2.770 233.504 2.906
201309 2.570 234.149 2.689
201312 2.570 233.049 2.701
201403 2.360 236.293 2.447
201406 2.980 238.343 3.063
201409 2.950 238.031 3.036
201412 1.850 234.812 1.930
201503 1.370 236.119 1.421
201506 0.300 238.638 0.308
201509 1.090 237.945 1.122
201512 -0.310 236.525 -0.321
201603 -0.390 238.132 -0.401
201606 -0.780 241.018 -0.793
201609 0.680 241.428 0.690
201612 0.220 241.432 0.223
201703 1.410 243.801 1.417
201706 0.770 244.955 0.770

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.

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

Shiller PE Ratio=Share Price/E10
=118.64/9.02
=13.15

* 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 Chevron Corp was 21.86. The lowest was 7.29. And the median was 12.31.


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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