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Sherwin-Williams Co  (NYSE:SHW) E10: $7.59 (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.

Sherwin-Williams Co's adjusted earnings per share data for the three months ended in Sep. 2017 was $3.330. Add all the adjusted EPS for the past 10 years together and divide 10 will get our e10, which is $7.59 for the trailing ten years ended in Sep. 2017.

As of today, Sherwin-Williams Co's current stock price is $386.98. Sherwin-Williams Co's E10 for the quarter that ended in Sep. 2017 was $7.59. Sherwin-Williams Co's Shiller PE Ratio of today is 50.99.

During the past 13 years, the highest Shiller PE Ratio of Sherwin-Williams Co was 54.26. The lowest was 15.35. And the median was 31.36.


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.

Sherwin-Williams 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 4.28 4.80 5.34 6.10 6.92

Sherwin-Williams 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 6.79 6.92 7.14 7.37 7.59

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, Sherwin-Williams 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)
=3.33/246.819*246.819
=3.330

Current CPI (Sep. 2017) = 246.819.

Sherwin-Williams Co Quarterly Data

per share eps CPI Adj_EPS
200712 0.820 210.036 0.964
200803 0.640 213.528 0.740
200806 1.450 218.815 1.636
200809 1.500 218.783 1.692
200812 0.430 210.228 0.505
200903 0.320 212.709 0.371
200906 1.350 215.693 1.545
200909 1.510 215.969 1.726
200912 0.610 215.949 0.697
201003 0.300 217.631 0.340
201006 1.640 217.965 1.857
201009 1.600 218.439 1.808
201012 0.680 219.179 0.766
201103 0.630 223.467 0.696
201106 1.660 225.722 1.815
201109 1.710 226.889 1.860
201112 0.160 225.672 0.175
201203 0.950 229.392 1.022
201206 2.170 229.478 2.334
201209 2.240 231.407 2.389
201212 0.650 229.601 0.699
201303 1.110 232.773 1.177
201306 2.460 233.504 2.600
201309 2.550 234.149 2.688
201312 1.150 233.049 1.218
201403 1.140 236.293 1.191
201406 2.940 238.343 3.045
201409 3.350 238.031 3.474
201412 1.380 234.812 1.451
201503 1.380 236.119 1.443
201506 3.700 238.638 3.827
201509 3.970 237.945 4.118
201512 2.120 236.525 2.212
201603 1.750 238.132 1.814
201606 3.990 241.018 4.086
201609 4.080 241.428 4.171
201612 2.140 241.432 2.188
201703 2.530 243.801 2.561
201706 3.360 244.955 3.386
201709 3.330 246.819 3.330

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.

Sherwin-Williams Co's Shiller P/E Ratio of today is calculated as

Shiller PE Ratio=Share Price/E10
=386.98/7.59
=50.99

* 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 Sherwin-Williams Co was 54.26. The lowest was 15.35. And the median was 31.36.


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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