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Morningstar Inc  (NAS:MORN) E10: $2.44 (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.

Morningstar Inc's adjusted earnings per share data for the three months ended in Jun. 2017 was $1.070. Add all the adjusted EPS for the past 10 years together and divide 10 will get our e10, which is $2.44 for the trailing ten years ended in Jun. 2017.

As of today, Morningstar Inc's current stock price is $85.22. Morningstar Inc's E10 for the quarter that ended in Jun. 2017 was $2.44. Morningstar Inc's Shiller PE Ratio of today is 34.93.

During the past 13 years, the highest Shiller PE Ratio of Morningstar Inc was 54.63. The lowest was 29.93. And the median was 39.31.


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.

Morningstar 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 0.00 1.65 1.81 2.05 2.33

Morningstar 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 2.16 2.20 2.33 2.35 2.44

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, Morningstar 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)
=1.07/244.955*244.955
=1.070

Current CPI (Jun. 2017) = 244.955.

Morningstar Inc Quarterly Data

per share eps CPI Adj_EPS
200709 0.410 208.490 0.482
200712 0.400 210.036 0.467
200803 0.470 213.528 0.539
200806 0.570 218.815 0.638
200809 0.450 218.783 0.504
200812 0.390 210.228 0.454
200903 0.510 212.709 0.587
200906 0.410 215.693 0.466
200909 0.450 215.969 0.510
200912 0.280 215.949 0.318
201003 0.400 217.631 0.450
201006 0.360 217.965 0.405
201009 0.490 218.439 0.549
201012 0.460 219.179 0.514
201103 0.440 223.467 0.482
201106 0.520 225.722 0.564
201109 0.420 226.889 0.453
201112 0.550 225.672 0.597
201203 0.400 229.392 0.427
201206 0.560 229.478 0.598
201209 0.560 231.407 0.593
201212 0.690 229.601 0.736
201303 0.630 232.773 0.663
201306 0.660 233.504 0.692
201309 0.680 234.149 0.711
201312 0.680 233.049 0.715
201403 0.580 236.293 0.601
201406 -0.220 238.343 -0.226
201409 0.670 238.031 0.689
201412 0.700 234.812 0.730
201503 0.670 236.119 0.695
201506 0.720 238.638 0.739
201509 0.760 237.945 0.782
201512 0.850 236.525 0.880
201603 0.670 238.132 0.689
201606 0.730 241.018 0.742
201609 0.700 241.428 0.710
201612 1.630 241.432 1.654
201703 0.420 243.801 0.422
201706 1.070 244.955 1.070

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.

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

Shiller PE Ratio=Share Price/E10
=85.22/2.44
=34.93

* 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 Morningstar Inc was 54.63. The lowest was 29.93. And the median was 39.31.


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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