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The Hershey Co  (NYSE:HSY) E10: $2.83 (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.

The Hershey Co's adjusted earnings per share data for the three months ended in Sep. 2017 was $1.280. Add all the adjusted EPS for the past 10 years together and divide 10 will get our e10, which is $2.83 for the trailing ten years ended in Sep. 2017.

As of today, The Hershey Co's current stock price is $108.31. The Hershey Co's E10 for the quarter that ended in Sep. 2017 was $2.83. The Hershey Co's Shiller PE Ratio of today is 38.27.

During the past 13 years, the highest Shiller PE Ratio of The Hershey Co was 44.88. The lowest was 17.94. And the median was 31.79.


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.

The Hershey Co 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 2.24 2.40 2.52 2.47 2.58

The Hershey Co 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 2.60 2.58 2.61 2.71 2.83

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, The Hershey Co'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)
=1.28/246.819*246.819
=1.280

Current CPI (Sep. 2017) = 246.819.

The Hershey Co Quarterly Data

per share eps CPI Adj_EPS
200712 0.220 210.036 0.259
200803 0.280 213.528 0.324
200806 0.180 218.815 0.203
200809 0.540 218.783 0.609
200812 0.360 210.228 0.423
200903 0.330 212.709 0.383
200906 0.310 215.693 0.355
200909 0.710 215.969 0.811
200912 0.550 215.949 0.629
201003 0.640 217.631 0.726
201006 0.200 217.965 0.226
201009 0.780 218.439 0.881
201012 0.580 219.179 0.653
201103 0.690 223.467 0.762
201106 0.550 225.722 0.601
201109 0.840 226.889 0.914
201112 0.660 225.672 0.722
201203 0.869 229.392 0.935
201206 0.590 229.478 0.635
201209 0.770 231.407 0.821
201212 0.665 229.601 0.715
201303 1.060 232.773 1.124
201306 0.700 233.504 0.740
201309 1.030 234.149 1.086
201312 0.821 233.049 0.870
201403 1.110 236.293 1.159
201406 0.750 238.343 0.777
201409 1.000 238.031 1.037
201412 0.910 234.812 0.957
201503 1.100 236.119 1.150
201506 -0.629 238.638 -0.651
201509 0.703 237.945 0.729
201512 0.517 236.525 0.540
201603 1.057 238.132 1.096
201606 0.680 241.018 0.696
201609 1.060 241.428 1.084
201612 0.540 241.432 0.552
201703 0.583 243.801 0.590
201706 0.950 244.955 0.957
201709 1.280 246.819 1.280

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.

The Hershey Co's Shiller P/E Ratio of today is calculated as

Shiller PE Ratio=Share Price/E10
=108.31/2.83
=38.27

* 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 The Hershey Co was 44.88. The lowest was 17.94. And the median was 31.79.


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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