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McCormick & Co Inc  (NYSE:MKC) E10: $3.12 (As of Aug. 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.

McCormick & Co Inc's adjusted earnings per share data for the three months ended in Aug. 2017 was $0.850. 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 Aug. 2017.

As of today, McCormick & Co Inc's current stock price is $99.25. McCormick & Co Inc's E10 for the quarter that ended in Aug. 2017 was $3.12. McCormick & Co Inc's Shiller PE Ratio of today is 31.81.

During the past 13 years, the highest Shiller PE Ratio of McCormick & Co Inc was 38.06. The lowest was 18.44. And the median was 27.56.


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.

McCormick & Co Inc Annual Data

Nov07 Nov08 Nov09 Nov10 Nov11 Nov12 Nov13 Nov14 Nov15 Nov16
E10 Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 2.24 2.39 2.55 2.70 2.92

McCormick & Co Inc Quarterly Data

Nov12 Feb13 May13 Aug13 Nov13 Feb14 May14 Aug14 Nov14 Feb15 May15 Aug15 Nov15 Feb16 May16 Aug16 Nov16 Feb17 May17 Aug17
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 2.87 2.92 2.98 3.05 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.


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, McCormick & Co Inc's adjusted earnings per share data for the three months ended in Aug. 2017 was:

Adj_EPS= Earnings per Share (Diluted) /CPI of Aug. 2017 (Change)*Current CPI (Aug. 2017)
=0.85/245.519*245.519
=0.850

Current CPI (Aug. 2017) = 245.519.

McCormick & Co Inc Quarterly Data

per share eps CPI Adj_EPS
200711 0.660 210.177 0.771
200802 0.390 211.693 0.452
200805 0.410 216.632 0.465
200808 0.520 219.086 0.583
200811 0.620 212.425 0.717
200902 0.440 212.193 0.509
200905 0.380 213.856 0.436
200908 0.570 215.834 0.648
200911 0.880 216.330 0.999
201002 0.510 216.741 0.578
201005 0.490 218.178 0.551
201008 0.760 218.312 0.855
201011 0.990 218.803 1.111
201102 0.570 221.309 0.632
201105 0.550 225.964 0.598
201108 0.690 226.545 0.748
201111 0.980 226.230 1.064
201202 0.550 227.663 0.593
201205 0.600 229.815 0.641
201208 0.780 230.379 0.831
201211 1.110 230.221 1.184
201302 0.570 232.166 0.603
201305 0.590 232.945 0.622
201308 0.780 233.877 0.819
201311 0.970 233.069 1.022
201402 0.620 234.781 0.648
201405 0.640 237.900 0.660
201408 0.940 237.852 0.970
201411 1.130 236.151 1.175
201502 0.550 234.722 0.575
201505 0.650 237.805 0.671
201508 0.760 238.316 0.783
201511 1.160 237.336 1.200
201602 0.730 237.111 0.756
201605 0.730 240.229 0.746
201608 1.000 240.849 1.019
201611 1.230 241.353 1.251
201702 0.740 243.603 0.746
201705 0.790 244.733 0.793
201708 0.850 245.519 0.850

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.

McCormick & Co Inc's Shiller P/E Ratio of today is calculated as

Shiller PE Ratio=Share Price/E10
=99.25/3.12
=31.81

* 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 McCormick & Co Inc was 38.06. The lowest was 18.44. And the median was 27.56.


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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