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Yum Brands Inc  (NYSE:YUM) E10: $2.94 (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.

Yum Brands Inc's adjusted earnings per share data for the three months ended in Sep. 2017 was $1.180. Add all the adjusted EPS for the past 10 years together and divide 10 will get our e10, which is $2.94 for the trailing ten years ended in Sep. 2017.

As of today, Yum Brands Inc's current stock price is $79.18. Yum Brands Inc's E10 for the quarter that ended in Sep. 2017 was $2.94. Yum Brands Inc's Shiller PE Ratio of today is 26.93.

During the past 13 years, the highest Shiller PE Ratio of Yum Brands Inc was 28.33. The lowest was 12.78. And the median was 22.52.


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.

Yum Brands 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 2.09 2.23 2.31 2.47 2.75

Yum Brands Inc 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 2.72 2.75 2.81 2.85 2.94

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, Yum Brands Inc'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)
=1.18/246.819*246.819
=1.180

Current CPI (Sep. 2017) = 246.819.

Yum Brands Inc Quarterly Data

per share eps CPI Adj_EPS
200712 0.440 210.036 0.517
200803 0.500 213.528 0.578
200806 0.450 218.815 0.508
200809 0.580 218.783 0.654
200812 0.430 210.228 0.505
200903 0.460 212.709 0.534
200906 0.630 215.693 0.721
200909 0.690 215.969 0.789
200912 0.450 215.949 0.514
201003 0.500 217.631 0.567
201006 0.590 217.965 0.668
201009 0.740 218.439 0.836
201012 0.560 219.179 0.631
201103 0.540 223.467 0.596
201106 0.650 225.722 0.711
201109 0.800 226.889 0.870
201112 0.750 225.672 0.820
201203 0.960 229.392 1.033
201206 0.690 229.478 0.742
201209 1.000 231.407 1.067
201212 0.730 229.601 0.785
201303 0.720 232.773 0.763
201306 0.610 233.504 0.645
201309 0.330 234.149 0.348
201312 0.700 233.049 0.741
201403 0.870 236.293 0.909
201406 0.730 238.343 0.756
201409 0.890 238.031 0.923
201412 -0.180 234.812 -0.189
201503 0.810 236.119 0.847
201506 0.530 238.638 0.548
201509 0.950 237.945 0.985
201512 0.630 236.525 0.657
201603 0.870 238.132 0.902
201606 0.810 241.018 0.829
201609 1.620 241.428 1.656
201612 0.770 241.432 0.787
201703 0.770 243.801 0.780
201706 0.580 244.955 0.584
201709 1.180 246.819 1.180

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.

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

Shiller PE Ratio=Share Price/E10
=79.18/2.94
=26.93

* 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 Yum Brands Inc was 28.33. The lowest was 12.78. And the median was 22.52.


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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