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3M Co  (NYSE:MMM) E10: $7.04 (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.

3M Co's adjusted earnings per share data for the three months ended in Sep. 2017 was $2.330. Add all the adjusted EPS for the past 10 years together and divide 10 will get our e10, which is $7.04 for the trailing ten years ended in Sep. 2017.

As of today, 3M Co's current stock price is $231.38. 3M Co's E10 for the quarter that ended in Sep. 2017 was $7.04. 3M Co's Shiller PE Ratio of today is 32.87.

During the past 13 years, the highest Shiller PE Ratio of 3M Co was 33.34. The lowest was 10.84. And the median was 21.48.


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.

3M 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 5.30 5.69 5.99 6.32 6.66

3M 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 6.66 6.66 6.72 6.90 7.04

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, 3M 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)
=2.33/246.819*246.819
=2.330

Current CPI (Sep. 2017) = 246.819.

3M Co Quarterly Data

per share eps CPI Adj_EPS
200712 1.180 210.036 1.387
200803 1.380 213.528 1.595
200806 1.330 218.815 1.500
200809 1.410 218.783 1.591
200812 0.780 210.228 0.916
200903 0.740 212.709 0.859
200906 1.120 215.693 1.282
200909 1.350 215.969 1.543
200912 1.310 215.949 1.497
201003 1.290 217.631 1.463
201006 1.540 217.965 1.744
201009 1.530 218.439 1.729
201012 1.270 219.179 1.430
201103 1.490 223.467 1.646
201106 1.600 225.722 1.750
201109 1.520 226.889 1.654
201112 1.350 225.672 1.477
201203 1.590 229.392 1.711
201206 1.660 229.478 1.785
201209 1.650 231.407 1.760
201212 1.410 229.601 1.516
201303 1.610 232.773 1.707
201306 1.710 233.504 1.808
201309 1.780 234.149 1.876
201312 1.620 233.049 1.716
201403 1.790 236.293 1.870
201406 1.910 238.343 1.978
201409 1.980 238.031 2.053
201412 1.820 234.812 1.913
201503 1.850 236.119 1.934
201506 2.020 238.638 2.089
201509 2.050 237.945 2.126
201512 1.660 236.525 1.732
201603 2.050 238.132 2.125
201606 2.080 241.018 2.130
201609 2.150 241.428 2.198
201612 1.880 241.432 1.922
201703 2.160 243.801 2.187
201706 2.580 244.955 2.600
201709 2.330 246.819 2.330

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.

3M Co's Shiller P/E Ratio of today is calculated as

Shiller PE Ratio=Share Price/E10
=231.38/7.04
=32.87

* 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 3M Co was 33.34. The lowest was 10.84. And the median was 21.48.


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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