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Mastercard Inc  (NYSE:MA) E10: $3.12 (As of Mar. 2019)

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 Mar. 2019 was $1.800. Add all the adjusted EPS for the past 10 years together and divide 10 will get our e10, which is $3.12 for the trailing ten years ended in Mar. 2019.

As of today, Mastercard Inc's current stock price is $252.55. Mastercard Inc's E10 for the quarter that ended in Mar. 2019 was $3.12. Mastercard Inc's Shiller PE Ratio of today is 80.95.

During the past 13 years, the highest Shiller PE Ratio of Mastercard Inc was 85.18. The lowest was 48.93. And the median was 67.01.


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.

Mastercard Inc Annual Data

Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18
E10 Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 1.26 1.58 1.98 2.29 2.91

Mastercard Inc Quarterly Data

Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17 Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19
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 2.43 2.67 2.87 2.91 3.12

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.


Mastercard Inc Distribution

* The bar in red indicates where Mastercard Inc's E10 falls into.



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 Mar. 2019 was:

Adj_EPS= Earnings per Share (Diluted) /CPI of Mar. 2019 (Change)*Current CPI (Mar. 2019)
=1.8/254.202*254.202
=1.800

Current CPI (Mar. 2019) = 254.202.

Mastercard Inc Quarterly Data

per share eps CPI Adj_EPS
200906 0.267 215.693 0.315
200909 0.345 215.969 0.406
200912 0.224 215.949 0.264
201003 0.346 217.631 0.404
201006 0.349 217.965 0.407
201009 0.394 218.439 0.459
201012 0.316 219.179 0.366
201103 0.429 223.467 0.488
201106 0.476 225.722 0.536
201109 0.563 226.889 0.631
201112 0.015 225.672 0.017
201203 0.536 229.392 0.594
201206 0.555 229.478 0.615
201209 0.617 231.407 0.678
201212 0.486 229.601 0.538
201303 0.620 232.773 0.677
201306 0.700 233.504 0.762
201309 0.730 234.149 0.793
201312 0.052 233.049 0.057
201403 0.730 236.293 0.785
201406 0.800 238.343 0.853
201409 0.870 238.031 0.929
201412 0.690 234.812 0.747
201503 0.890 236.119 0.958
201506 0.810 238.638 0.863
201509 0.860 237.945 0.919
201512 0.790 236.525 0.849
201603 0.860 238.132 0.918
201606 0.890 241.018 0.939
201609 1.080 241.428 1.137
201612 0.860 241.432 0.905
201703 1.000 243.801 1.043
201706 1.100 244.955 1.142
201709 1.340 246.819 1.380
201712 0.210 246.524 0.217
201803 1.410 249.554 1.436
201806 1.500 251.989 1.513
201809 1.820 252.439 1.833
201812 0.870 251.233 0.880
201903 1.800 254.202 1.800

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
=252.55/3.12
=80.95

* 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 85.18. The lowest was 48.93. And the median was 67.01.


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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