GURUFOCUS.COM » STOCK LIST » Financial Services » Insurance » Berkshire Hathaway Inc (NYSE:BRK.A) » Definitions » PE Ratio

Berkshire Hathaway (Berkshire Hathaway) PE Ratio

: 9.05 (As of Today)
View and export this data going back to 1980. Start your Free Trial

The PE Ratio, or Price-to-Earnings ratio, or P/E Ratio, is a financial ratio used to compare a company's market price to its Earnings per Share (Diluted). As of today (2024-04-17), Berkshire Hathaway's share price is $600300.00. Berkshire Hathaway's Earnings per Share (Diluted) for the trailing twelve months (TTM) ended in Dec. 2023 was $66,318.00. Therefore, Berkshire Hathaway's PE Ratio for today is 9.05.

Good Sign:

Berkshire Hathaway Inc stock PE Ratio (=9.01) is close to 1-year low of 8.32

During the past 13 years, Berkshire Hathaway's highest PE Ratio was 129.98. The lowest was 5.17. And the median was 15.16.

Berkshire Hathaway's EPS (Diluted) for the three months ended in Dec. 2023 was $25,990.00. Its EPS (Diluted) for the trailing twelve months (TTM) ended in Dec. 2023 was $66,318.00.

As of today (2024-04-17), Berkshire Hathaway's share price is $600300.00. Berkshire Hathaway's EPS without NRI for the trailing twelve months (TTM) ended in Dec. 2023 was $66,318.00. Therefore, Berkshire Hathaway's PE Ratio without NRI ratio for today is 9.05.

During the past 13 years, Berkshire Hathaway's highest PE Ratio without NRI was 129.98. The lowest was 5.16. And the median was 15.11.

Berkshire Hathaway's EPS without NRI for the three months ended in Dec. 2023 was $25,990.00. Its EPS without NRI for the trailing twelve months (TTM) ended in Dec. 2023 was $66,318.00.

During the past 3 years, the average EPS without NRI Growth Rate was 27.70% per year.

During the past 13 years, Berkshire Hathaway's highest 3-Year average EPS without NRI Growth Rate was 183.40% per year. The lowest was -43.70% per year. And the median was 20.80% per year.

Berkshire Hathaway's EPS (Basic) for the three months ended in Dec. 2023 was $25,990.00. Its EPS (Basic) for the trailing twelve months (TTM) ended in Dec. 2023 was $66,318.00.

Back to Basics: PE Ratio


Berkshire Hathaway PE Ratio Historical Data

The historical data trend for Berkshire Hathaway's PE Ratio can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Berkshire Hathaway Annual Data
Trend Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
PE Ratio
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 6.82 13.04 7.57 At Loss 8.17

Berkshire Hathaway Quarterly Data
Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23
PE Ratio 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 At Loss 91.64 8.70 10.10 8.17

Competitive Comparison

For the Insurance - Diversified subindustry, Berkshire Hathaway's PE Ratio, along with its competitors' market caps and PE Ratio data, can be viewed below:

* 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. Note that "N/A" values will not show up in the chart.


Berkshire Hathaway PE Ratio Distribution

For the Insurance industry and Financial Services sector, Berkshire Hathaway's PE Ratio distribution charts can be found below:

* The bar in red indicates where Berkshire Hathaway's PE Ratio falls into.



Berkshire Hathaway PE Ratio Calculation

The PE Ratio, or Price-to-Earnings ratio, or P/E Ratio, is a financial ratio used to compare a company's market price to its Earnings per Share (Diluted). It is the most widely used ratio in the valuation of stocks.

Berkshire Hathaway's PE Ratio for today is calculated as

PE Ratio=Share Price/Earnings per Share (Diluted) (TTM)
=600300.00/66318.000
=9.05

Berkshire Hathaway's Share Price of today is $600300.00.
Berkshire Hathaway's Earnings per Share (Diluted) for the trailing twelve months (TTM) ended in Dec. 2023 adds up the quarterly data reported by the company within the most recent 12 months, which was $66,318.00.


* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

It can also be calculated from the numbers for the whole company:


There are at least three kinds of PE Ratios used by different investors. They are Trailing Twelve Month PE Ratio, Forward PE Ratio, or PE Ratio without NRI. A new PE Ratio based on inflation-adjusted normalized PE Ratio is called Shiller PE Ratio, after Yale professor Robert Shiller.

In the calculation of PE Ratio, the earnings per share used are the earnings per share over the past 12 months. For Forward PE Ratio, the earnings are the expected earnings for the next twelve months. In the case of PE Ratio without NRI, the reported earnings less the non-recurring items are used.

For Shiller PE Ratio, the earnings of the past 10 years are inflation-adjusted and averaged. Since it looks at the average over the last 10 years, Shiller PE Ratio is also called PE10.


Berkshire Hathaway  (NYSE:BRK.A) PE Ratio Explanation

The PE Ratio can be viewed as the number of years it takes for the company to earn back the price you pay for the stock. For example, if a company earns $2 a share per year, and the stock is traded at $30, the PE Ratio is 15. Therefore it takes 15 years for the company to earn back the $30 you paid for its stock, assuming the earnings stays constant over the next 15 years.

In real business, earnings never stay constant. If a company can grow its earnings, it takes fewer years for the company to earn back the price you pay for the stock. If a company's earnings decline it takes more years. As a shareholder, you want the company to earn back the price you pay as soon as possible. Therefore, lower P/E stocks are more attractive than higher P/E stocks so long as the PE Ratio is positive. Also for stocks with the same PE Ratio, the one with faster growth business is more attractive.

If a company loses money, the PE Ratio becomes meaningless.

To compare stocks with different growth rates, Peter Lynch invented a ratio called PEG Ratio. PEG Ratio is defined as the PE Ratio divided by the growth ratio. He thinks a company with a PE Ratio equal to its growth rate is fairly valued. Still he said he would rather buy a company growing 20% a year with a PE Ratio of 20, instead of a company growing 10% a year with a PE Ratio of 10.

Because the PE Ratio measures how long it takes to earn back the price you pay, the PE Ratio can be applied to the stocks across different industries. That is why it is the one of the most important and widely used indicators for the valuation of stocks.

Similar to the PE Ratio without NRI or PS Ratio or Price-to-Operating-Cash-Flow or Price-to-Free-Cash-Flow , the PE Ratio measures the valuation based on the earning power of the company. This is where it is different from the PB Ratio , which measures the valuation based on the company's balance sheet.


Be Aware

Investors need to be aware that the PE Ratio can be misleading a lot of times, especially when the underlying business is cyclical and unpredictable. As Peter Lynch pointed out, cyclical businesses have higher profit margins at the peaks of the business cycles. Their earnings are high and PE Ratios are artificially low. It is usually a bad idea to buy a cyclical business when the PE Ratio is low. A better ratio to identify the time to buy a cyclical businesses is the PS Ratio.

PE Ratio can also be affected by non-recurring-items such as the sale of part of businesses. This may increase for the current year or quarter dramatically. But it cannot be repeated over and over. Therefore PE Ratio without NRI is a more accurate indication of valuation than PE Ratio.


Berkshire Hathaway PE Ratio Related Terms

Thank you for viewing the detailed overview of Berkshire Hathaway's PE Ratio provided by GuruFocus.com. Please click on the following links to see related term pages.


Berkshire Hathaway (Berkshire Hathaway) Business Description

Address
3555 Farnam Street, Omaha, NE, USA, 68131
Berkshire Hathaway is a holding company with a wide array of subsidiaries engaged in diverse activities. The firm's core business segment is insurance, run primarily through Geico, Berkshire Hathaway Reinsurance Group, and Berkshire Hathaway Primary Group. Berkshire has used the excess cash thrown off from these and its other operations over the years to acquire Burlington Northern Santa Fe (railroad), Berkshire Hathaway Energy (utilities and energy distributors), and the firms that make up its manufacturing, service, and retailing operations (which include five of Berkshire's largest noninsurance pretax earnings generators: Precision Castparts, Lubrizol, Clayton Homes, Marmon, and IMC/ISCAR). The conglomerate is unique in that it is run on a completely decentralized basis.
Executives
Ronald L Olson director EDISON INTERNATIONAL, 2244 WALNUT GROVE AVENUE, ROSEMEAD CA 91770
Ajit Jain director, officer: Vice Chairman 100 FIRST STAMFORD PLACE, BHRG, STAMFORD CT 06902
Charles T Munger director, officer: Vice Chairman 355 S GRAND AV, 34TH FL, LOS ANGELES CA 90071
Warren E Buffett director, 10 percent owner, officer: Chairman and CEO 3555 FARNAM ST, STE 1440, OMAHA NE 68131
Meryl B Witmer director 655 THIRD AVENUE, 11TH FLOOR, NEW YORK NY 10017
Kenneth I Chenault director C/O GENERAL CATALYST, 20 UNIVERSITY ROAD, 4TH FLOOR, CAMBRIDGE MA 02138
David S Gottesman director
Charlotte Guyman director 3324 78TH PL. N.E., MEDINA WA 98004
Gregory Abel director, officer: Vice Chairman 666 GRAND AVE., STE.500, DES MOINES IA 50309
Thomas S Murphy director C/O WALT DISNEY CO, 500 S BUENA VISTA STREET, BURBANK CA 91521-1010
Stephen B Burke director 41 CENTRAL PARK WEST - APT 11A, NEW YORK NY 10023
Keough Donald R /ny director 200 GALLERIA PARKWAY, SE, SUITE 970, ATLANTA 2Q 30339-5945
Bill & Melinda Gates Foundation Trust 10 percent owner 2365 CARILLON POINT, KIRKLAND WA 98033
Susan L Decker director C/O YAHOO INC, 701 FIRST AVE, SUNNYVALE CA 94089
Malcolm G Chace director ONE PROVIDENCE WASHINGTON PLZ, 4TH FL, PROVIDENCE RI 02903

Berkshire Hathaway (Berkshire Hathaway) Headlines