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Eaton Corp PLC  (NYSE:ETN) E10: $3.69 (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.

Eaton Corp PLC's adjusted earnings per share data for the three months ended in Jun. 2017 was $1.150. Add all the adjusted EPS for the past 10 years together and divide 10 will get our e10, which is $3.69 for the trailing ten years ended in Jun. 2017.

As of today, Eaton Corp PLC's current stock price is $78.93. Eaton Corp PLC's E10 for the quarter that ended in Jun. 2017 was $3.69. Eaton Corp PLC's Shiller PE Ratio of today is 21.39.

During the past 13 years, the highest Shiller PE Ratio of Eaton Corp PLC was 25.14. The lowest was 6.95. And the median was 19.01.


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.

Eaton Corp PLC 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 2.94 3.19 3.34 3.48 3.59

Eaton Corp PLC 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 3.56 3.58 3.59 3.63 3.69

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, Eaton Corp PLC'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)
=1.15/244.955*244.955
=1.150

Current CPI (Jun. 2017) = 244.955.

Eaton Corp PLC Quarterly Data

per share eps CPI Adj_EPS
200709 0.855 208.490 1.005
200712 0.855 210.036 0.997
200803 0.820 213.528 0.941
200806 1.015 218.815 1.136
200809 0.935 218.783 1.047
200812 0.475 210.228 0.553
200903 -0.150 212.709 -0.173
200906 0.085 215.693 0.097
200909 0.570 215.969 0.647
200912 0.630 215.949 0.715
201003 0.460 217.631 0.518
201006 0.660 217.965 0.742
201009 0.780 218.439 0.875
201012 0.830 219.179 0.928
201103 0.830 223.467 0.910
201106 0.970 225.722 1.053
201109 1.070 226.889 1.155
201112 1.070 225.672 1.161
201203 0.910 229.392 0.972
201206 1.120 229.478 1.196
201209 1.020 231.407 1.080
201212 0.410 229.601 0.437
201303 0.790 232.773 0.831
201306 1.040 233.504 1.091
201309 1.070 234.149 1.119
201312 1.000 233.049 1.051
201403 0.920 236.293 0.954
201406 0.360 238.343 0.370
201409 1.260 238.031 1.297
201412 1.230 234.812 1.283
201503 0.990 236.119 1.027
201506 1.140 238.638 1.170
201509 0.960 237.945 0.988
201512 1.140 236.525 1.181
201603 0.880 238.132 0.905
201606 1.070 241.018 1.087
201609 1.150 241.428 1.167
201612 1.120 241.432 1.136
201703 0.960 243.801 0.965
201706 1.150 244.955 1.150

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.

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

Shiller PE Ratio=Share Price/E10
=78.93/3.69
=21.39

* 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 Eaton Corp PLC was 25.14. The lowest was 6.95. And the median was 19.01.


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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