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Westlake Chemical Corp  (NYSE:WLK) E10: $2.95 (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.

Westlake Chemical Corp's adjusted earnings per share data for the three months ended in Sep. 2017 was $1.610. Add all the adjusted EPS for the past 10 years together and divide 10 will get our e10, which is $2.95 for the trailing ten years ended in Sep. 2017.

As of today, Westlake Chemical Corp's current stock price is $111.12. Westlake Chemical Corp's E10 for the quarter that ended in Sep. 2017 was $2.95. Westlake Chemical Corp's Shiller PE Ratio of today is 37.67.

During the past 13 years, the highest Shiller PE Ratio of Westlake Chemical Corp was 48.81. The lowest was 16.66. And the median was 28.92.


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.

Westlake Chemical Corp 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 1.75 2.13 2.43 2.60

Westlake Chemical Corp 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 2.54 2.60 2.72 2.80 2.95

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, Westlake Chemical Corp'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)
=1.61/246.819*246.819
=1.610

Current CPI (Sep. 2017) = 246.819.

Westlake Chemical Corp Quarterly Data

per share eps CPI Adj_EPS
200712 0.145 210.036 0.170
200803 0.040 213.528 0.046
200806 0.360 218.815 0.406
200809 0.210 218.783 0.237
200812 -0.835 210.228 -0.980
200903 -0.045 212.709 -0.052
200906 0.130 215.693 0.149
200909 0.225 215.969 0.257
200912 0.090 215.949 0.103
201003 0.135 217.631 0.153
201006 0.430 217.965 0.487
201009 0.475 218.439 0.537
201012 0.635 219.179 0.715
201103 0.625 223.467 0.690
201106 0.605 225.722 0.662
201109 0.505 226.889 0.549
201112 0.195 225.672 0.213
201203 0.655 229.392 0.705
201206 0.860 229.478 0.925
201209 0.650 231.407 0.693
201212 0.710 229.601 0.763
201303 0.920 232.773 0.976
201306 1.090 233.504 1.152
201309 1.270 234.149 1.339
201312 1.280 233.049 1.356
201403 1.180 236.293 1.233
201406 1.260 238.343 1.305
201409 1.250 238.031 1.296
201412 1.380 234.812 1.451
201503 1.100 236.119 1.150
201506 1.540 238.638 1.593
201509 1.390 237.945 1.442
201512 0.840 236.525 0.877
201603 0.940 238.132 0.974
201606 0.850 241.018 0.870
201609 0.510 241.428 0.521
201612 0.760 241.432 0.777
201703 1.060 243.801 1.073
201706 1.170 244.955 1.179
201709 1.610 246.819 1.610

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.

Westlake Chemical Corp's Shiller P/E Ratio of today is calculated as

Shiller PE Ratio=Share Price/E10
=111.12/2.95
=37.67

* 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 Westlake Chemical Corp was 48.81. The lowest was 16.66. And the median was 28.92.


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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