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Mastercard Inc  (NYSE:MA) E10: $2.24 (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.

Mastercard Inc's adjusted earnings per share data for the three months ended in Jun. 2017 was $1.100. Add all the adjusted EPS for the past 10 years together and divide 10 will get our e10, which is $2.24 for the trailing ten years ended in Jun. 2017.

As of today, Mastercard Inc's current stock price is $145.56. Mastercard Inc's E10 for the quarter that ended in Jun. 2017 was $2.24. Mastercard Inc's Shiller PE Ratio of today is 64.98.

During the past 13 years, the highest Shiller PE Ratio of Mastercard Inc was 81.84. The lowest was 47.61. And the median was 64.06.


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.

Mastercard Inc 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 0.71 1.02 1.31 1.63 2.03

Mastercard Inc 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 1.86 1.95 2.03 2.13 2.24

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, Mastercard Inc'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)
=1.1/244.955*244.955
=1.100

Current CPI (Jun. 2017) = 244.955.

Mastercard Inc Quarterly Data

per share eps CPI Adj_EPS
200709 0.231 208.490 0.271
200712 0.227 210.036 0.265
200803 0.337 213.528 0.387
200806 -0.574 218.815 -0.643
200809 -0.149 218.783 -0.167
200812 0.185 210.228 0.216
200903 0.280 212.709 0.322
200906 0.267 215.693 0.303
200909 0.345 215.969 0.391
200912 0.224 215.949 0.254
201003 0.346 217.631 0.389
201006 0.349 217.965 0.392
201009 0.394 218.439 0.442
201012 0.316 219.179 0.353
201103 0.429 223.467 0.470
201106 0.476 225.722 0.517
201109 0.563 226.889 0.608
201112 0.014 225.672 0.015
201203 0.536 229.392 0.572
201206 0.555 229.478 0.592
201209 0.617 231.407 0.653
201212 0.483 229.601 0.515
201303 0.620 232.773 0.652
201306 0.700 233.504 0.734
201309 0.730 234.149 0.764
201312 0.510 233.049 0.536
201403 0.730 236.293 0.757
201406 0.800 238.343 0.822
201409 0.870 238.031 0.895
201412 0.700 234.812 0.730
201503 0.890 236.119 0.923
201506 0.810 238.638 0.831
201509 0.860 237.945 0.885
201512 0.790 236.525 0.818
201603 0.860 238.132 0.885
201606 0.890 241.018 0.905
201609 1.080 241.428 1.096
201612 0.860 241.432 0.873
201703 1.000 243.801 1.005
201706 1.100 244.955 1.100

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.

Mastercard Inc's Shiller P/E Ratio of today is calculated as

Shiller PE Ratio=Share Price/E10
=145.56/2.24
=64.98

* 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 Mastercard Inc was 81.84. The lowest was 47.61. And the median was 64.06.


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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