Switch to:
Berkshire Hathaway Inc  (NYSE:BRK.B) PE Ratio without NRI: 20.70 (As of Today)

As of today, Berkshire Hathaway Inc's share price is USD 183.16. Berkshire Hathaway Inc's EPS without NRI for the trailing twelve months (TTM) ended in Jun. 2017 was USD 8.85. Therefore, Berkshire Hathaway Inc's P/E (NRI) ratio for today is 20.70.

During the past 13 years, Berkshire Hathaway Inc's highest P/E (NRI) Ratio was 58.61. The lowest was 11.75. And the median was 16.31.

Berkshire Hathaway Inc's EPS without NRI for the three months ended in Jun. 2017 was USD 1.73. Its EPS without NRI for the trailing twelve months (TTM) ended in Jun. 2017 was USD 8.85.

As of today, Berkshire Hathaway Inc's share price is USD 183.16. Berkshire Hathaway Inc's Earnings per Share (Diluted) for the trailing twelve months (TTM) ended in Jun. 2017 was USD 8.84. Therefore, Berkshire Hathaway Inc's PE Ratio for today is 20.71.

During the past years, Berkshire Hathaway Inc's highest PE Ratio was 58.61. The lowest was 11.75. And the median was 16.31.

Berkshire Hathaway Inc's EPS (Diluted)for the three months ended in Jun. 2017 was USD 1.73. Its EPS (Diluted) for the trailing twelve months (TTM) ended in Jun. 2017 was USD 8.84.

Berkshire Hathaway Inc's EPS (Basic) for the three months ended in Jun. 2017 was USD 1.73. Its EPS (Basic) for the trailing twelve months (TTM) ended in Jun. 2017 was USD 8.84.


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.

Berkshire Hathaway Inc Annual Data

Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Dec16
PE Ratio without NRI Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 14.93 15.01 18.69 13.50 16.67

Berkshire Hathaway Inc Quarterly Data

Sep12 Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17
PE Ratio without NRI 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 13.99 15.28 16.67 18.22 19.20

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

P/E ratio can 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 P/E (NRI) is a more accurate indication of valuation than Non Operating Income>PE Ratio.

Berkshire Hathaway Inc's P/E (NRI) Ratio for today is calculated as

P/E (NRI) Ratio=Share Price/ EPS without NRI
=183.16/8.85
=20.70

Berkshire Hathaway Inc's Share Price of today is USD 183.16.
Berkshire Hathaway Inc's EPS without NRI for the trailing twelve months (TTM) ended in Jun. 2017 was 2.92 (Sep. 2016 ) + 2.55 (Dec. 2016 ) + 1.65 (Mar. 2017 ) + 1.73 (Jun. 2017 ) = USD 8.85.

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

There are at least three kinds of P/E ratios used by different investors. They are Trailing Twelve Month P/E Ratio or P/E (ttm), forward P/E, or P/E (NRI). A new P/E ratio based on inflation-adjusted normalized P/E ratio is called Shiller PE Ratio, after Yale professor Robert Shiller.

In the case of P/E (NRI), the reported earnings less the non-recurring items are used.

In the calculation of PE Ratio, the earnings per share used are the earnings per share over the past 12 months.

For Forward P/E, the earnings are the expected earnings for the next twelve months.

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, Shiller P/E is also called PE10.


Explanation

The P/E 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 P/E 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 P/E ratio is positive. Also for stocks with the same P/E ratio, the one with faster growth business is more attractive.

If a company loses money, the P/E ratio becomes mearningless.

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

Because the P/E ratio measures how long it takes to earn back the price you pay, the P/E 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 Price/Sales ratio and Price/Cash Flow or Price/Free Cash Flow, the P/E ratio measures the valuation based on the earning power of the company. This is where it is different from the Price/Book ratio, which measures the valuation based on the company's balance sheet.


Be Aware

Investors need to be aware that the P/E 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 P/E ratios are artificially low. It is usually a bad idea to buy a cyclical business when the P/E is low. A better ratio to identify the time to buy a cyclical businesses is the Price-to-Sales Ratio (P/S).


Related Terms


Headlines

No Headline

Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GF Chat

{{numOfNotice}}
FEEDBACK