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General Dynamics Corp  (NYSE:GD) E10: $7.86 (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.

General Dynamics Corp's adjusted earnings per share data for the three months ended in Mar. 2019 was $2.560. Add all the adjusted EPS for the past 10 years together and divide 10 will get our e10, which is $7.86 for the trailing ten years ended in Mar. 2019.

As of today, General Dynamics Corp's current stock price is $173.63. General Dynamics Corp's E10 for the quarter that ended in Mar. 2019 was $7.86. General Dynamics Corp's Shiller PE Ratio of today is 22.09.

During the past 13 years, the highest Shiller PE Ratio of General Dynamics Corp was 31.86. The lowest was 9.63. And the median was 20.16.


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.

General Dynamics Corp 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 5.62 6.14 6.62 7.10 7.63

General Dynamics Corp 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 7.34 7.48 7.59 7.63 7.86

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.


General Dynamics Corp Distribution

* The bar in red indicates where General Dynamics Corp'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, General Dynamics Corp'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)
=2.56/254.202*254.202
=2.560

Current CPI (Mar. 2019) = 254.202.

General Dynamics Corp Quarterly Data

per share eps CPI Adj_EPS
200906 1.600 215.693 1.886
200909 1.470 215.969 1.730
200912 1.570 215.949 1.848
201003 1.530 217.631 1.787
201006 1.670 217.965 1.948
201009 1.700 218.439 1.978
201012 1.910 219.179 2.215
201103 1.640 223.467 1.866
201106 1.760 225.722 1.982
201109 1.800 226.889 2.017
201112 1.680 225.672 1.892
201203 1.570 229.392 1.740
201206 1.770 229.478 1.961
201209 1.700 231.407 1.867
201212 -6.070 229.601 -6.720
201303 1.620 232.773 1.769
201306 1.810 233.504 1.970
201309 1.840 234.149 1.998
201312 1.400 233.049 1.527
201403 1.710 236.293 1.840
201406 1.580 238.343 1.685
201409 2.060 238.031 2.200
201412 2.090 234.812 2.263
201503 2.140 236.119 2.304
201506 2.270 238.638 2.418
201509 2.280 237.945 2.436
201512 2.400 236.525 2.579
201603 2.040 238.132 2.178
201606 2.300 241.018 2.426
201609 2.090 241.428 2.201
201612 2.580 241.432 2.716
201703 2.480 243.801 2.586
201706 2.450 244.955 2.542
201709 2.520 246.819 2.595
201712 2.100 246.524 2.165
201803 2.650 249.554 2.699
201806 2.620 251.989 2.643
201809 2.850 252.439 2.870
201812 3.070 251.233 3.106
201903 2.560 254.202 2.560

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.

General Dynamics Corp's Shiller P/E Ratio of today is calculated as

Shiller PE Ratio=Share Price/E10
=173.63/7.86
=22.09

* 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 General Dynamics Corp was 31.86. The lowest was 9.63. And the median was 20.16.


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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